Caixin China manufacturing PMI falls to 47.2 in Sept.

China's manufacturing activity continued to sag but at a slower pace in September, according to a survey by financial information service provider Markit and sponsored by Caixin Media Co. Ltd.

The Caixin General China Manufacturing Purchasing Managers' Index (PMI) was 47.2 in September, down from a final reading of 47.3 in August but slightly higher than an earlier flash reading of 47 for September, according to data released Thursday.

It was the seventh month of decline in a row for the index. A reading above 50 indicates expansion, while a reading below 50 represents contraction.

He Fan, chief economist at Caixin Insight Group, said the manufacturing industry has reached a crucial stage in structural transformation, noting that tepid demand is a main factor behind the weakness.

"The industry was still weak, but the downward movement has slowed somewhat," he said.

September saw a sharper contraction of manufacturing output, as firms cut production schedules due to worsening business conditions and subdued client demand.

Total new orders fell further, partly caused by the steepest decline in new orders from abroad since March 2009.

Manufacturing firms continued to cut their staff numbers in September, leading to the sharpest reduction in employment in 80 months.

The survey also showed a decrease of the service business activity index, which slipped to 50.5 in September, down from 51.5 in August and the lowest in 14 months.

However, service activity remained in expansion territory and employment improved from August, pointing to continued strength of the service sector in creating jobs.

China's official PMI came in at 49.8 in September, up from 49.7 for August after two months of decline in a row, according to data released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing. Endi