Chinese manufacturing activity drops in September

China-s manufacturing activity dropped in September due to global slowdown and lower export demand. The manufacturing activity contrated for three straight months which is the longest contraction period since last recession in 2009. The purchasing managers- index, published by HSBC Holdings Plc and Markit Economics dropped to 49.9 in September. Any reading below 50 indicates contraction.

The contraction in manufacturing activity is mainly due to fall in worldwide demand of Chinese manufactured products due to global slowdown and current euro zone debt crisis. The current debt crisis in the developed economies have reduced export demand significantly which is affecting Chinese manufacturing industry. IMF has also cut the growth outlook of China with other emerging economies last week.