China’s manufacturing rebounds as economy shows signs of stabilizing

China’s manufacturing activity increased for the first time in six months in September, according to an official survey released on Saturday, citing that the world’s second-largest economy has bottomed out.

The purchasing managers’ index (PMI), which is based on a survey of major factories, increased to 50.2 in September from 49.7 in August, edging beyond the 50-point mark that separates contraction from expansion. The reading exceeded the expectation of 50.0, according to the National Bureau of Statistics.

The PMI, the first official numbers for September, adds to evidence of economic stabilization, which had slumped following an initial surge of energy earlier in the year when China’s ultra-restrictive COVID-19 restrictions were eased.

In August, preliminary signs of stabilization emerged, with manufacturing output and retail sales growth quickening while export and import reductions were reduced and deflationary pressures eased. Profits for industrial enterprises increased 17.2% in August, reversing a 6.7% fall in July.

China’s non-manufacturing PMI climbed as well, rising to 51.7 from 51.0 in August.

In September, the composite PMI, which includes manufacturing and non-manufacturing activity, increased to 52.0 from 51.3.