Business News Asia
China’s factory activity shrank sharply in September due to the strict lockdown of Covid This caused production disruptions and reduced sales.
The falling global demand for Chinese goods has a huge impact on the manufacturing sector. New export orders contracted the fastest in 4 months.
Caixin/Markit Manufacturing Purchasing Managers Index (PMI) fell more than expected to 48.1 in September from 49.5 in August. That’s below the 50 point, which separates growth from monthly contraction.
Companies surveyed indicate that the COVID-19 epidemic It’s the factor that affects the most.
The manufacturer reported a sharp drop in sales. The sub-index for all new orders and new export orders both contracted for the second month in a row in September.
Companies have cut production for the first time in 4 months and layoffs for the sixth month in a row to cut costs. Raising concerns about a weak labor market
Producers also reduced their purchasing activity, with the purchasing volume sub-index dropping for a second month in September. This is because there are fewer new orders and fewer overall stock downsizing efforts.
to boost sales Manufacturers look to pass on cost savings to customers. This led to the sharpest drop in the yield sub-index since December 2015.
China narrowly escaped economic contraction in the June quarter. by being affected by the deterioration of assets slowing consumption and strict restrictions on COVID-19, periodic outbreaks of the virus Affect activities again in late August and early September.
Analysts expect the economy to grow just 3% this year, the slowest since 1976, excluding the 2.2% growth during the COVID-19 impact in 2020.
Nomura has lowered China’s annual GDP growth forecast to 2.7% in 2022.