Manufacturing in China accelerates
October 2, 2009
By Bloomberg Beijing
China's manufacturing expanded at the fastest pace in 17 months last month on stimulus spending and this year's record growth in new loans.
The purchasing managers' index rose to a seasonally adjusted 54.3 from 54 in August, the Federation of Logistics and Purchasing said yesterday in a statement in Beijing.
The latest number was lower than the median estimate of 55 in a survey of 13 economists. A reading above 50 indicates an expansion.
China, which marked 60 years of Communist Party rule yesterday, pledged to maintain stimulus policies to create jobs, maintain social stability and strengthen the recovery of its economy. A manufacturing index released by HSBC Holdings on Wednesday also showed an expansion last month as a 4 trillion yuan (R4.4 trillion) stimulus package countered a slump in exports.
"Manufacturing is likely to keep climbing steadily as investment, production and retail sales all rebound further and exports bottom out," said Lu Zhengwei, an economist at Industrial Bank in Shanghai. Lu estimated China's economy might grow 9 percent this quarter, up from 7.9 percent in the previous three months.
China's stock markets were closed yesterday for a public holiday.
The manufacturing figure for September compared with a record-low 38.8 last November, when recessions in the US, Europe and Japan sent export orders plunging and Beijing's stimulus package was yet to kick in. China's economic growth would keep strengthening for the rest of this year, economists said in August.
The output index rose to 58 last month from 57.9 in August, the measure of new orders climbed to 56.8 from 56.3, and the export order index increased to 53.3 from 52.1, according to yesterday's statement.
The index of employment rose to 53.2, the highest level since April last year, from 51.4. Fifteen out of the 20 industries surveyed by the agency showed expansion last month.
"China's economy will continue to rebound, and with the... fast recovery in employment and incomes, that rebound is sustainable," Zhang Liqun, a researcher at the State Council Development and Research Centre, said yesterday.
Zhang warned that policy makers must focus on preserving growth as China's economic rebound was not solid and the recovery was mainly driven by government stimulus rather than consumption.
The manufacturing index, released by the federation and the National Bureau of Statistics, is based on replies to questionnaires sent to purchasing executives at more than 730 companies in 20 industries.
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