Thought for the day

China Sales Managers Survey Results for September

Chinese Manufacturing Sector problems now outweighing growth in Services


 
Last updated: 23 September 2024
 
The difference between the Chinese Services and Manufacturing sectors performance continued to remain in evidence in September, but the September numbers suggest that neither sector looks healthy any longer. The (larger) Services sector is continuing to grow (but at a much reduced rate), and the Manufacturing sector edged deeper into negative territory. Overall, the September Survey results suggest that declining levels of activity in the Manufacturing sector are now close to outweighing the limited growth continuing in the Services sector, putting a large question mark over likely economic growth levels in 2025.

China Headline Sales Managers Index (Manufacturing & Services)
Diffusion Index. (50 = 'No Growth')
China Sales Managers Survey Results for September
The Services sector continues to provide growth momentum, but even here, Business Confidence levels have fallen significantly, and no longer reflect high levels of confidence in the fourth quarter, or the first quarter of 2025. Business Confidence in the Services sector has in fact fallen to a 13 month low. Hence a question mark has arisen over whether limited growth in the services sector can continue to propel the Chinese economy overall to anything like its previously healthy levels of economic growth, given the drag of the less than buoyant Manufacturing sector.

There is no doubt that the Manufacturing sector of the Chinese economy remains subdued. The overall Sales Managers Index for Manufacturing fell again in September to a 7 month low of 48.6, well below the 50 "no growth" line. There is little encouraging information to be found in the September numbers for the manufacturing sector.

Readers must now have a significantly optimistic disposition before they can start to believe that the world's great growth engine of the past few decades is moving back towards its previously central role in sponsoring global economic expansion.
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