BEIJING: China's factory activity is forecast to have expanded at its fastest rate in 17 months in September, a Reuters poll showed, reinforcing signs of a turnaround in the world's second-largest economy as both domestic and external demand improve.
The official manufacturing purchasing managers' index (PMI) is forecast to rise to 51.5 in September from August's 51, according to the median estimate of 14 economists. If realised, it would be the highest reading since April 2012.
A reading above 50 indicates expanding activity while one below it points to a contraction. A preliminary private PMI survey by HSBC/Markit released this week showed the factory sector grew at its fastest pace in six months in September.
The official PMI, which is weighted more towards bigger and state-owned companies, generally paints a rosier picture than the private survey, which focuses more on smaller and private sector firms.
"With the help of a recovering global economy and government's pro-growth measures being effectively implemented, the rebounding trend in the manufacturing sector seen in August is expected to continue in September," said Nie Wen, an analyst at Hwabao Trust in Shanghai.
Beijing has stepped up efforts to prevent a sharp economic slowdown by quickening railway investment and public housing construction and introducing measures to help smaller companies.
Recent data has shown some of the impact of those policies, with factory output in August hitting a 17-month high and retail sales growing at their fastest pace this year.
Profits earned by industrial firms rose 24.2 per cent in August from a year earlier, more than double the growth rate in July, data showed on Friday.
Grace Ng, senior China economist at JP Morgan in Hong Kong, also attributed the recovering momentum to lagging effects from strong credit growth earlier in the year and a more benign outlook for the global economy.
But economists caution about being too quick to cheer a recovery, pointing to signs that Beijing looks to be again relying on traditional growth drivers of investment and exports.
They also noted that after a surge in liquidity -- the total social financing aggregate nearly doubled to 1.57 trillion yuan ($256.5 billion) in August from July -- credit conditions could tighten again later this year.
"The stabilising economic performance in August suggested there might be little chance for maintaining loose liquidity conditions in the fourth quarter.
Economic growth might slow again in November and December," said Nie from Hwabao Trust. Premier Li Keqiang said earlier this month the economy was stable but there was a need to guard against risks.
indiatimes.com
The official manufacturing purchasing managers' index (PMI) is forecast to rise to 51.5 in September from August's 51, according to the median estimate of 14 economists. If realised, it would be the highest reading since April 2012.
A reading above 50 indicates expanding activity while one below it points to a contraction. A preliminary private PMI survey by HSBC/Markit released this week showed the factory sector grew at its fastest pace in six months in September.
The official PMI, which is weighted more towards bigger and state-owned companies, generally paints a rosier picture than the private survey, which focuses more on smaller and private sector firms.
"With the help of a recovering global economy and government's pro-growth measures being effectively implemented, the rebounding trend in the manufacturing sector seen in August is expected to continue in September," said Nie Wen, an analyst at Hwabao Trust in Shanghai.
Beijing has stepped up efforts to prevent a sharp economic slowdown by quickening railway investment and public housing construction and introducing measures to help smaller companies.
Recent data has shown some of the impact of those policies, with factory output in August hitting a 17-month high and retail sales growing at their fastest pace this year.
Profits earned by industrial firms rose 24.2 per cent in August from a year earlier, more than double the growth rate in July, data showed on Friday.
Grace Ng, senior China economist at JP Morgan in Hong Kong, also attributed the recovering momentum to lagging effects from strong credit growth earlier in the year and a more benign outlook for the global economy.
But economists caution about being too quick to cheer a recovery, pointing to signs that Beijing looks to be again relying on traditional growth drivers of investment and exports.
They also noted that after a surge in liquidity -- the total social financing aggregate nearly doubled to 1.57 trillion yuan ($256.5 billion) in August from July -- credit conditions could tighten again later this year.
"The stabilising economic performance in August suggested there might be little chance for maintaining loose liquidity conditions in the fourth quarter.
Economic growth might slow again in November and December," said Nie from Hwabao Trust. Premier Li Keqiang said earlier this month the economy was stable but there was a need to guard against risks.
indiatimes.com
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