China's factory activity shrank for a sixth month in a row in September, official data showed today, as a domestic consumer slump and lingering trade uncertainty weigh on the economy.
The manufacturing purchasing managers' index (PMI) came in at 49.8, narrowly below the value of 50 separating contraction from expansion, according to the National Bureau of Statistics (NBS).
The reading was better than the forecast of 49.6 in a Bloomberg survey of economists and was the highest since March.
But it extended a streak of contraction that began in April, as factories across the manufacturing powerhouse contend with turbulence from the ongoing US-China trade war.
"Overall economic output expansion in the country accelerated slightly" during the month, said NBS statistician Huo Lihui in a statement.
The figures come just before the start of the country's "Golden Week" National Day holiday, a period that usually sees slower factory activity.
Official data also showed today that the non-manufacturing PMI, which measures activity in sectors including services and construction, fell to 50 in September from 50.3 in August.
That was short of a Bloomberg forecast of 50.2 and was the lowest since November.
"Economic momentum is weak in the third quarter," Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.
"Export activities have been surprisingly resilient so far this year and helped to partly offset the weak domestic demand."
Consumer prices in China fell in August at their fastest rate for six months, a sign of continuing struggles on that front.
"Since the GDP growth was above 5% in the first half, the government may tolerate the slowdown in the second half as long as it doesn't jeopardise the full-year growth target of five percent," Zhang wrote.
The recent slump comes as Beijing and Washington work to negotiate a deal to end their bruising trade war, with the world's top two economies extending a truce on most reciprocal duties to November 10.
