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China's Private Sector Expands Moderately In September

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China's private sector logged a moderate growth in September as improved services activity was offset by softer manufacturing growth, survey data from IHS Markit showed Monday.

The Caixin composite output index rose marginally to 52.1 in September from 52.0 in August. A score above 50 indicates expansion.

At the same time, the services Purchasing Managers' Index picked up to 53.1 from 51.5 a month ago, to signal the strongest increase in activity for three months.

However, manufacturing production showed a marginal pace of expansion that was the weakest since October 2017.

New business followed a similar trend, with services companies registering a stronger rise in new orders. The service sector sale was the fastest since June as firms linked their growth to new product offerings and increased client bases.

Composite new order inflows continued to expand at a relatively subdued pace, with growth picking up only slightly from August's 26-month low.

Staffing levels fell across both the manufacturing and service sectors in September. Although the decline in services employment was only marginal, it marked the first reduction in the sector for over two years.

As a result, headcounts at composite level fell at the fastest rate since August 2016.

On the price front, the survey showed that the rate of input price inflation in services accelerated to the second-steepest since May 2012. Measured on a composite basis, input price inflation accelerated to a three-month high in September.

Despite the faster increase in input costs, services companies signaled broadly no change to their output charges. Overall, prices charged for Chinese goods and services increased at a marginal pace that was the slowest recorded since June 2017.

Chinese companies are generally optimistic that output will increase over the next year. Measured across both sectors, expectations fell to their second-lowest in ten months.

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