(Yicai Global) Sept. 30 -- China’s official gauge of factory activity contracted this month for the first time since February last year as production and demand fell, having declined for a sixth month in a row from this year’s peak in March.

The purchasing managers’ index for manufacturing stood at 49.6 in September, down from 50.1 last month, according to data released by the National Bureau of Statistics today. A figure below 50 indicates contraction. The manufacturing PMI hit 51.9 in March.

The surprise shrinkage in factory activity comes after flooding, sporadic outbreaks of the coronavirus, higher material costs, and supply chain disruptions in China in recent months as well as electricity rationing to industry this month.

“Due to the low sentiment of high energy-consuming industries, the manufacturing PMI fell below the threshold,” NBS senior statistician Zhao Qinghe said. But 12 of the 21 surveyed sectors were above the threshold, indicating expansion, he added. That was two more than last month.

The sub-indexes for production and new orders also contracted in September, falling to their lowest points this year. The production index stood at 49.5, down from 50.9 in August, while that for new orders was at 49.3, down from 49.6.

But activate in the service sector rebounded, according to the NBS data. The non-manufacturing PMI jumped to 53.2, from an 18-month low of 47.5 in August, as the incidence of Covid-19 outbreaks declined. The business activity sub-index surged into positive territory at 52.4, up from 45.2. Some 16 out of the 21 fields surveyed came in above 50, compared with seven last month.

The composite PMI index, an indicator of economic activity in both China’s manufacturing and non-manufacturing sectors, rose to 51.7 from 48.9, indicating that overall production and business activities at Chinese enterprises gained momentum.

The sub-indexes for energy-intense fields including petroleum, coal and fuel processing were all below 45, showing that supply and demand have fallen substantially, Zhao said.

The construction sector remained robust, despite its business activity sub-index dropping to 57.5 from 60.5.

Editor: Kim Taylor