(Yicai) Sept. 30 -- Activity in China’s manufacturing sector showed signs of improvement for the second straight month in September, despite contracting for the sixth month in a row, buoyed by expanded domestic demand.

The manufacturing purchasing managers’ index came in at 49.8 this month, up from 49.4 in August, according to data released by the National Bureau of Statistics today. A reading below 50 indicates contraction.

The PMI fell into contraction territory in April amid an escalation in China-United States trade tensions. It was 49 in April, 49.5 in May, 49.7 in June, and 49.3 in August.

The production sub-index remained in expansion for the fifth month in a row in September, climbing to 51.9 from 50.8 the month before, the NBS data showed. The procurement sub-index rose for the second consecutive month to 51.6 from 50.4.

The new orders sub-index remained in contraction territory but improved to 49.7 from 49.5 in the period, according to the NBS. Employment also continued to contract but more slowly, rising to 48.5 from 47.9.

The data indicate that the effect of policies aimed at stabilizing growth has become more apparent, said Zhang Liqun, a special analyst at the China Federation of Logistics and Purchasing.

Sub-indexes showed signs of recovery in business production and operations, but price-related indexes continued to decline, and order-related indexes remained below the halfway mark, indicating that demand shortfalls are still a prominent issue, Zhang noted.

Looking ahead to the fourth quarter, macroeconomic policies are expected to be further strengthened, said Wen Tao, an analyst at the China Logistics Information Center.

The National Day holiday and the e-commerce promotional season will boost demand in the consumer goods market, while accelerated infrastructure construction will drive the release of demand for raw materials and equipment, Wen noted. As a result, manufacturing production activities are expected to maintain steady growth, he added.

The non-manufacturing PMI, which includes the construction and services sectors, fell to 50 in September from 50.3 the month before, according to the NBS data.

The services PMI fell to 50.1 from 50.5 in the period, mainly due to the off-season in consumer services following the summer period. However, with the arrival of the National Day holiday in October, the prosperity of the services industry is expected to rebound, said Wu Wei, an expert from the CLIC.

The composite PMI output index, which combines the production sub-index of the manufacturing PMI and the non-manufacturing PMI, rose for the second consecutive month to 50.6 in September from 50.5 in August and 50.2 in July, indicating an acceleration in production and business activities, according to the NBS.

Editors: Dou Shicong, Futura Costaglione