(Yicai) Sept. 30 -- Activity in China’s manufacturing sector contracted by the least in five consecutive months in September, according to official data.

The manufacturing purchasing managers’ index came in at 49.8 this month, up from August’s six-month low of 49.1, July’s 49.4, and 49.5 in June and May, according to data released by the National Bureau of Statistics today. A reading below 50 indicates contraction.

Production rose the most in five months, coming in at 51.2, up from August’s decline to 49.8. New orders grew to 49.9 from 48.9, ending a five-month drop, while new export orders fell to 47.5 from 48.7. Business sentiment remained unchanged at 52.

This month was the seasonal demand peak for some industries, and the effects of policies aimed at expanding demand, such as large-scale equipment renewal and the trade-in of consumer goods, continued to show through. And while external demand is weakening, overall demand is stable, supported by domestic consumption.

The gain in September’s manufacturing PMI gain reflects both seasonal factors and initial signs of economic stabilization in China, said Zhang Liqun, an analyst at the China Federation of Logistics and Purchasing, adding that the increase in production, new orders, and prices suggests that activity is starting to recover.

But purchasing volumes and imports continued to decline, showing that weak demand remains a significant issue, and the recovery in activity is not yet stable, Zhang noted.

China’s manufacturing sector has rebounded in terms of supply and demand, and economic fundamentals have consolidated, said Wen Tao, an expert from the China Logistics Information Center.

Last week, China’s central bank unveiled the country’s biggest economic stimulus package since the Covid-19 pandemic, including cuts to the amount of cash banks are required to hold in reserve, a key policy rate, and rates on existing mortgages. 

Editor: Futura Costaglione