This morning China’s government will release its latest manufacturing PMI report for September, something that will likely dictate investor sentiment later in the session.
Here’s the state of play.
- A PMI gauge has a neutral level of 50, a point where overall activity levels across the sector are neither expanding nor contracting.
- A level below 50 indicates that activity is contracting while a figure above 50 suggests activity levels are expanding.
- The NBS PMI report is the most comprehensive report on manufacturing sector conditions in the country, covering 3,200 firms across 31 separate industries.
- In August the PMI gauge fell to 49.7, the lowest level seen since August 2012.
- Of the five subcomponents that make up the headline index, two expanded while three contracted.
- Production fell to 51.7 while supplier delivery times improved to 50.6. Of those below 50 new orders, a lead indicator on likely production levels in the future, along with inventories and employment registered scores of 49.7, 48.3 and 47.9.
- Reflective of the weakness seen in the separate Caixin-Markit PMI gauge, a report that concentrates on small-to-medium sized firms, the NBS reported that the contraction in smaller firms was far more severe than that for larger firms.
- Large and medium sized enterprises registered readings of 49.9 and 49.8 respectively, significantly higher than the 48.1 level of smaller firms.
- In September, activity levels are expected to contract at a faster pace with a decline to 49.6 expected.
The PMI report will be released at 11am AEST. Business Insider will have full coverage as soon as the data drops.