Source: CNBC
Date: 30th September 2025

Official PMI improves to 49.8 in September, while private survey signals expansion.

China’s manufacturing sector showed a smaller-than-expected contraction in September, as government efforts to address industrial overcapacity provided some support to production.

The official Manufacturing Purchasing Managers’ Index rose to 49.8, stronger than market forecasts and the highest reading since March, though still below the 50 mark that separates growth from contraction.

Sub-indices pointed to improving production and a modest rise in new orders, with equipment, high-tech, and consumer goods leading the recovery.

Private data painted a more optimistic picture, with a major independent survey recording a PMI of 51.2 in September, above expectations and indicating expansion.

Export orders and rising demand contributed to the stronger performance, underscoring a divergence between the official and private assessments of manufacturing activity.

Meanwhile, non-manufacturing activity, including services and construction, softened slightly, with both official and private indicators showing modest declines compared to the prior month.

Despite the improvement, broader economic indicators suggest China’s growth momentum remains under pressure.

Retail sales growth has weakened for three consecutive months, consumer prices slipped back into negative territory, and domestic demand continues to lag.

Industrial profits rose in August as the government stepped up efforts to reduce supply gluts and curb aggressive price competition, but policymakers are expected to address further measures at the upcoming Politburo meeting.

With first-half GDP growth at 5.3%, authorities remain on track to meet the annual target, though sustaining medium-term growth at similar levels poses significant challenges.

For global trade, exporters, and shippers, the mixed signals from China’s manufacturing sector highlight continued volatility.

Rising export orders may benefit shipping lines and logistics providers in the short term, but weak domestic consumption and ongoing tariff pressures from the U.S. create uncertainty for long-haul trade flows.

Shippers face fluctuating demand levels that complicate capacity planning, while exporters must prepare for potential shifts in sourcing strategies as China balances overcapacity with external trade pressures.

These dynamics reinforce the need for diversified markets and resilient supply chain strategies in global logistics.