China's manufacturing contracted again in Septemberbut improved from the previous month in a possible sign an economic slowdown isbottoming out.
An industry group, the China Federation of Logistics &Purchasing, said Monday its monthly purchasing managers' index stood at 49.8points on a 100-point scale on which numbers below 50 indicate a contraction.That was up 0.6 points from August's numbers and the first improvement in fourmonths.
The data added to signs China's deepest economic downturnsince the 2008 global crisis might be stabilizing but officials includingPresident Hu Jintao have warned conditions might deteriorate further beforegrowth rebounds.
China's economic growth fell to a three-year low of 7.6percent in the quarter ending in June. That is strong by Western standards buthas hurt Chinese manufacturers and construction companies that depend on highgrowth.
Analysts are forecasting a turnaround late this year or inearly 2013 but have pushed back their time frame due to weakness in keyEuropean and U.S. export markets. They say a Chinese recovery is likely to betoo weak to drive a global rebound without improvement in developed economies.
Some forecasters point to higher bank lending in recentmonths as a sign of an impending uptick in growth but other indicators have yetto show improvement.
A separate PMI released Saturday by HSBC Corp. showedactivity rose slightly to 47.9 on a similar 100-point scale, still showing acontraction but improved from August's 47.6.
China's slowdown is due largely to government lending andinvestment curbs imposed to cool inflation and steer rapid growth to a moremanageable level, but the country also has been hurt by the unexpectedly sharpdecline in export demand.
The government has cut interest rates twice since June andis pumping money into the economy through higher investment by state companiesand more spending on building subways and other public works. But authoritiesare moving more cautiously than they did after the 2008 crisis, when the hugestimulus that helped China rebound also fueled inflation and a wastefulbuilding boom.
The logistics federation said the production component ofits index improved to 51.3, up 0.4 points from August. It said clothing, automanufacturing, food-processing, electronics and some other industries showedactivity expanding. Steel production, metal fabrication and equipmentmanufacturing contracted.
New export orders rose 2.2 points from August'slevel to 48.8, though that still showed a contraction.