Key China index shows shrinking factory activity

The key gauge for China's manufacturing sector shows that factory activity shrank in September.

The Purchasing Managers' Index for manufacturers was down mainly due to surging prices of raw materials and a power crunch.

The National Bureau of Statistics says the manufacturing PMI stood at 49.6 for September. That is down 0.5 points from the previous month and logged the sixth-straight month of decline.

The 50-point mark separates growth from contraction.
The index has slipped below the level for the first time since February last year, when the economy was hit hard by the spread of the coronavirus.

Bureau officials attribute September's contraction to surging prices of coal and crude oil, as well as power rationing at factories in various parts of the country.
Business sentiment is worsening, notably among smaller enterprises. Officials say production and market demand are weakening.

The non-manufacturing sector PMI was 53.2, recovering from the previous month, when it showed a contraction.