BEIJING (Reuters) – Chinese factory activity unexpectedly contracted in September as high commodity prices and power cuts put pressure on manufacturers in the world’s second-largest economy, while the services resumed expansion as COVID-19 epidemics receded.
The official manufacturing purchasing managers index (PMI) was 49.6 in September from 50.1 in August, data from the National Bureau of Statistics (NBS) showed on Thursday, sliding into contraction for the first time since February. 2020.
Analysts in a Reuters poll expected the index to remain stable at 50.1, unchanged from the previous month. The 50 point mark separates growth from contraction.
China’s economy quickly recovered from a pandemic-induced slump last year, but momentum has weakened in recent months as its sprawling manufacturing sector is hit by rising costs, bottlenecks production and more recently the rationing of electricity.
Reflecting production pressures, a sub-index of manufacturing output contracted in September for the first time since February last year, and stood at 49.6 from 50.1 a month earlier .
“In September, due to factors such as low volumes of activity in energy-intensive industries, the manufacturing PMI fell below the critical point,” Zhao Qinghe, senior statistician of NBS, said in a statement. communicated.
“The two indices of energy-intensive industries such as petroleum, coal and other fuel processing, man-made fibers and rubber and plastic products, ferrous metal smelting and rolling are both below 45.0, indicating a significant drop in supply and demand. “
A coal shortage, stricter emissions standards, and strong demand from manufacturers and industry have pushed coal prices to record highs and triggered widespread restrictions on electricity use in at least 20 provinces and regions.
Rising commodity prices, especially metals and semiconductors, also weighed on manufacturers’ profits. Chinese industrial company profits in August slowed for the sixth consecutive month.
A commodity costs sub-index fell to 63.5 in September from 61.3 a month earlier, while the new orders indicator stood at 49.3 from 49.6 in August, declining for the second consecutive month.
An employment sub-index continued to contract, to 47.8 from 47.0 a month earlier.
On a more optimistic note, the official non-manufacturing PMI in September was 53.2, rebounding from 47.5 in August, according to NBS data, as COVID-19 outbreaks receded after rising for months summer.
COVID-19 cases were reported in dozens of cities over the summer during the most severe outbreak since early January, disrupting activity in service and manufacturing sectors, especially small ones companies and factories.
COVID-19-related restrictions last month caused a sharp contraction in service sector activity for the first time since the pandemic peaked last year.
The official composite PMI index for September, which includes both manufacturing and services activity, stood at 51.7 from 48.9 in August.