Wednesday, September 23, 2015

China Factory Orders Decline Again

Today’s Purchasing Managers’ Index shows a sharpening contraction in manufacturing in China. Koh Gui Qing reporting at Reuters:

The preliminary Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) fell to 47.0 in September, the worst since March 2009 . . . the survey showed business conditions deteriorating almost across the board . . .

The index points to a slight decline in orders placed at Chinese factories, most of them from other countries. A one-month contraction would not indicate a trend, but the PMI has indicated a contraction almost all year. When added up, it is likely that global manufacturing is expanding slightly, but it is hard to be sure.

Global stock markets have fallen on the manufacturing news, though Europe so far is not following the trend. Europe, though, was already down sharply yesterday on details of a diesel software defect at Volkswagen. The Volkswagen scandal is also a negative for global manufacturing, as Volkswagen has suspended sales and production of some of its diesel cars.

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