In other surveys released on Thursday, the official services PMI for September came in at 53.4, unchanged from August, while Caixin’s final report showed the services index slumping to a 14-month low of 50.5. Although indicative of a moderate decrease in cost burdens, the respective index posted its lowest reading since February 2009.
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The index is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 300 industrial companies. The former often have difficulties in securing credit from the state-led banking system.
“The data probably increases the case for more stimulus in certain parts of the world, especially from the People’s Bank of China and the European Central Bank”, said Philip Shaw, economist at Investec in London. Falling output prices could be one of the reasons for growth in consumer demand, Shah said. The health of the sector has now deteriorated in each of the past seven months. The country’s pace of growth is at its slowest in 25 years.
The latest survey of activity in the sector also recorded positive readings for the Quantity of Purchases and Employment. “Input costs decreased for the second month running in September, a situation not seen since the financial crisis”.
Thursday’s PMI data for Singapore, which was released after the markets closed, showed declines in new domestic and export orders, production and employment. Any figure greater than 50.0 indicates overall improvement of sector operating conditions. India’s GDP growth slowed to 7% in the quarter to June from 7.5% in the previous quarter.
Markit said that the manufacturing sector remained “sluggish” in September due to a sharp slowdown in consumer spending, weak business investment and stagnant export orders. As a result, buying activity at South Korean goods producers fell at a softer pace.
Each of the report’s four key metrics, including the PMI, was down in September, as was the case in August.
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A PMI covering Germany, Europe’s largest economy and home to a few of its best-known manufacturers, fell as well to 52.3 from August’s 53.3.
