Manufacturing activity in China steadies after nine-month slump

Manufacturing activity in China firmed up in September after slumping to a nine-month low in August, even though output fell to its lowest level in 10 months, according to a  survey of factory managers Reuters reports.

Then HSBC Flash China manufacturing purchasing managers' index (PMI) inched higher to 47.8, from 47.6 in August, in a broad steadying across the sub-indexes in the survey.

Though the economy might not have declined in September, some signs of a fast turnaround were evident. In fact, the PMI, offering the first glimpse of September's conditions for Chinese industry, seems to point to a month that saw the halting of a slide, though not its reversal.

"China's manufacturing growth is still slowing, but the pace of slowdown is stabilising. Manufacturing activities remain lacklustre, thanks to weak new business flows and a longer than expected destocking process," Reuters cited a statement by Qu Hongbin, chief economist for China at HSBC.

"This is adding more pressure to the labour market and has prompted Beijing to step up easing over the past weeks. The recent easing measures should be working to lead to a modest improvement from Q4 onwards."

China introduced a series of measures last week to help stabilise export growth, as also faster payment of export tax rebates and boosting loans to exporters.