China's manufacturing activity shrank only marginally in September despite the weakening global growth, the latest report from Markit Economics showed Friday. However, inflation quickened to a four-month high during the month.
The Markit/HSBC purchasing managers' index, or PMI, for the manufacturing sector was 49.9 in September, unchanged from August. Though the score was stronger than the flash estimate of 49.4, it averaged the lowest quarterly reading since the first quarter of 2009. A reading below 50 signals contraction in activity.
Commenting on the data, HSBC chief economist Hongbin Qu said the September PMI still stays below 50, but shows some signs of stabilizing.
"This implies that although the lagged effects of credit tightening will continue to cool industrial activity in the months ahead, there is little need to worry about a sharp slowdown," the economist added.
Qu expects China's economic growth to hold up at around 8.5-9 percent in the coming years. The Conference Board's leading indicator for China has signaled continued economic expansion through the end of this year, albeit at a slower pace.
According to the Markit survey, production increased marginally, while new orders recorded a decline for a second consecutive month due to muted demand conditions. New export business fell for a fifth month in succession.
Earlier this month, the Asian Development Bank, or ADB, lowered its economic growth outlook for China, citing flagging demand from advanced economies amid a slump in confidence and slowdown in growth.
The lender now expects gross domestic product to rise 9.3 percent this year and 9.1 percent next year.
Markit said that the average input costs rose sharply in September, with the rate of inflation quickening to a four-month high due to higher raw material prices. The increase was only slightly slower than the long-run series average.
Manufacturers continued to pass on increased costs to clients through higher average tariffs. The rate of output price inflation was solid but much slower than that for input prices, the survey showed.
According to official data, inflation slowed for the first time in four months in August, easing the pressure on the central bank to continue monetary tightening amid weakening global growth prospects. The rate eased to 6.2 percent in August from July's 3-year high of 6.5 percent.
At the same time, a survey by the central bank revealed earlier this month that inflation expectations among Chinese households increased sharply in the third quarter.
ADB, in its latest edition of the Asia Economic Monitor, raised its 2011 inflation forecast for China to 5.3 percent from 4.6 percent. According to the bank, the inflation rate for developing Asia is expected to average 5.8 percent this year.
ADB has urged the central banks across developing Asia to keep a close watch on inflation and capital flows and to take remedial action, if needed.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.