China manufacturing continues rebound in September
BEIJING, Oct. 1 (AFP)
Manufacturing activity in China continued its rebound in September on improving production and demand, government data showed Saturday -- a positive sign for the world's second-largest economy. The official purchasing managers' index (PMI) came in at 50.4 for September -- exactly the same level as in August, which was its highest since October 2014 -- figures from the National Bureau of Statistics (NBS) showed. A figure above 50 signals expanding activity, while anything below demonstrates shrinkage. Investors closely watch the PMI readings, which gauge conditions at Chinese factories and mines, as the first indicator of the health of the economy each month. The September figure was up from July's 49.9 and compared to the median forecast of 50.5 in a Bloomberg News survey of economists. After August's unexpected surge, some experts had expected a deceleration. But heavy rain and flooding in the south and centre of the country have fuelled a surge in demand as reconstruction work gets underway. The manufacturing sector has also been supported by a rise in the property market, with prices of new apartments up some 40 percent year-on-year in some cities and 25 percent in Beijing, which boosts demand for construction materials, furniture and appliances. China's key manufacturing sector has been struggling in the face of sagging global demand for Chinese products and excess industrial capacity left over from the country's infrastructure boom. But Saturday's data add to evidence of improvement as government fiscal support and the soaring property market help underpin growth. Fresh signs of stability may lead policy makers to remain on hold after keeping their benchmark rate at a record low for almost a year. "Thanks to heavy fiscal stimulus through (state owned enterprise) investments, production related to infrastructure projects and the enlarging current account surplus, GDP growth could edge up to 6.9 percent in Q3 and Q4, bringing the annual figure to 6.8 percent," Alicia Garcia Herrero, chief economist of Natixis Asia Limited in Hong Kong wrote in a recent report, according to Bloomberg news. China is a vital driver of global growth, but its economy expanded only 6.9 percent in 2015 -- its weakest rate in a quarter of a century -- and has slowed further this year. Beijing has said it wants to reorient the economy away from one relying on debt-fuelled investment and towards a consumer-driven model, but the transition has proven challenging.
U.K. Companies See Fastest Pickup in a Year as
Expectations Rise LONDON, Oct. 2 (Bloomberg) Businesses expect Britain to end the year on a high, with improvements in manufacturing, retail and services spurring the fastest pickup in more than a year. Companies expectations for output in the fourth quarter rose to 22 in September, the Confederation of British Industry said in its monthly growth indicator report released on Sunday. Thats the highest since September 2015. Even so, it sounded an alarm about longerterm prospects, with sentiment and investment intentions likely to remain subdued. Firms are confident that autumn will bring a surge in activity, said Rain Newton-Smith, chief economist at the CBI. With businesses keen to build momentum for the rest of the year and into 2017, they want the government to outline clear plans for negotiations to leave the European Union. Recent data show the U.K. economy has been stronger than expected in the aftermath of Britains vote to leave the EU. Still, the CBI said firms were more cautious on the longer-term economic outlook, with business decisions likely to be delayed. Firms optimism about general business conditions have deteriorated sharply, falling at rates last seen during the height of the euro zone crisis at the end of 2011, and in some cases during the 2008/9 recession, the group said, citing its survey data. While sentiment might recover to some degree as further details emerge of the governments plans and timing for the Brexit negotiations, it is likely to remain subdued.