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Index shows China's manufacturing industry still buoyant
Last Updated(Beijing Time):2006-09-09 09:24
The China Manufacturing Purchasing Managers' Index (PMI), which tracks economic activity in China's manufacturing sector each month, has stayed above 50 percent for 20 consecutive months since it was launched in January 2005.

The continuing high position of the index suggests that in general enterprises are optimistic about the future and the economy, said sources with the China Federation of Logistics & Purchasing (CFLP), the index compiler.

According to the latest statistics from the CFLP, the PMI rose 0.7 percentage points in August to 53.1 percent, which reflects companies' confidence about the stable growth of the manufacturing industry.

The CFLP report attributes the index growth to the increase of new purchase orders and more export contracts. A PMI reading above 50 percent indicates an overall expansion in the industry, and a reading below 50 shows an overall contraction.

Every month questionnaires are sent to over 700 manufacturing companies all over China. The companies' responses about their purchasing activities and supply situations are fed into the index.

The index, based on internationally standardized methodology, is a good indication of the prevailing direction and scope of economic change, according to index compilers.

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