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Elliot Clarke, Research Analyst at Westpac, notes that coming in at 50.8, the official NBS manufacturing PMI registered its weakest outcome since September 2016 (50.4).

Key Quotes

“While production was 1.2ppts below the long-run average, and total orders -1.7ppts, new export orders were 3.2ppts below average, down from -1.5ppts over the past 3 months.”

“The Caixin survey similarly highlighted deteriorating external demand, its export orders index was also 3.2ppts below average in September – materially weaker than both total orders and production.”

“It is likely that the consumer strength seen in the first half has carried into Q3.”

“All told, the deceleration in China’s PMIs to date is consistent with the softening of global trade. A tariff effect will come, but not until early 2019. Ahead, the services sector and domestic economy more broadly should show resilience.”