Econintersect: The HSBC Flash PMI (Purchasing Manager's Index) has a preliminary reading of 47.8 for September, up slightly from August's 47.6. Any number below 50 indicates contraction. The index is reported twice a month by HSBC (Hong Kong Shanghai Bank), the first (preliminary) reading the third week of the month and the final reading approximately one week later. The report indicated the manufacturing slowdown over the first nine months of 2012 might be slowing down, or even stabilizing.
The HSBC Flash PMI is an indicator of China's industrial activity slanted toward private and export-oriented firms and is based on information obtained from about 420 companies, mostly smaller and mid-sized. There is also an official PMI reported each month by the Chinese government which covers mostly large corporations and SOEs (state owned enterprises). The official PMI has been much stronger than the Flash PMI this year, dropping just under 50 for the first time in 2012 in August. The official PMI for September has not yet been announced.
An article in Shanghai Daily provides the following quotation:
Qu Hongbin, chief economist for China at HSBC, said that although China's manufacturing growth was still slowing, the pace of the slowdown was stabilizing.
"Manufacturing activities remain lackluster due to weak new business flows and a longer-than- expected destocking process," Qu said.
"This is adding more pressure to the labor market and has prompted China to step up easing over the past weeks. The recent easing measures should be working to lead to a modest improvement from the fourth quarter onward," Qu added.
- Flash PMI showing slight signs of recovery (Wang Yanlin, Shanghai Daily, 21 September 2012)
- China: Both PMI Readings Indicate Contraction, Asian Stocks Decline (GEI News, 03 September 2012)