Downward pressures weigh on China

The flash HSBC/Markit manufacturing Purchasing Managers’ Index (PMI) likely straddled the boom-bust line of 50 in September, the median forecast of 19 economists showed, dipping from August’s final PMI reading of 50.2, a three-month low.

The first indicator to preview how the world’s second-largest economy has fared each month, the flash PMI is closely watched by investors, especially at a time when concerns about the Chinese economy are growing.

“There’s still a lot of downward pressure on the economy, especially from the property sector,” said Julian Evans-Pritchard, an economist at Capital Economics.

China’s economy has stumbled this year as a slowdown in the housing market further weighed on softening domestic demand.

Worries China was slipping into a deeper downturn were heightened when data showed factory output grew at the weakest pace in nearly six years in August as growth in other key sectors also cooled.

The run of weak data, including a measure for the amount of credit in China that crumbled to a six-year low in July, has fed speculation the authorities may further loosen fiscal and monetary policies to stoke growth.