China November PMI bounces back
Print Edition
FACTORY activity in China returned to growth in November for the first time in seven months, as domestic demand picked up.
The Purchasing Managers’ Index bounced back to 50.2 in November, its highest since March, China’s National Bureau of Statistics said on Saturday, above the 50-point mark that separates growth from contraction on a monthly basis.
The result compared with 49.3 in October.
November’s figure re-entered the expansion zone, ending month-on-month contraction reported in the previous six months in a row, said NBS senior statistician Zhao Qinghe.
The official factory gauge pointed to an improvement in China’s vast manufacturing sector last month. Total new orders bounced back to expansionary territory with the sub-index rising to 51.3, the highest level seen since April. That indicates domestic consumption firmed up. Factory output also rose to 52.6 in November, marking the strongest pace since March.
“In the short term, we may have already passed the low point where the economy hit the bottom,” Zhang Deli, a macro analyst with Lianxun Securities, wrote in a note.
Improvements were seen in both the supply side and demand side, with both indices at their highest level since the second half of the year, said Zhao.
Imports and exports were improving in November, said Zhao, as the NBS data showed the sub-index for new export orders gained 1.8 points to 48.8, while the index for imports climbed 2.9 points to 49.8.
Chinese enterprises, in general, reported prosperity rebounds, with the PMI of large enterprises up 1 point from the previous month to 50.9, back in the expansion zone.
In November, PMI of high-tech manufacturing, equipment manufacturing and consumer goods all rose for two consecutive months, showing accelerated transformation and upgrades, said Zhao.
Growth in China’s services sector also quickened in November, while construction activity held up well, but growth in the latter slowed compared to the previous month, a separate statistics bureau survey showed.
The official non-manufacturing PMI picked up to 54.4, recovering from October’s 52.8, the lowest point since February 2016.
“The distinct pick-up in the manufacturing PMI resulted from multiple positive factors,” said Wen Tao, an analyst with the China Logistics Information Center, noting that domestic market demand potential has been released upon the country’s counter-cyclical adjustments and tax cuts.
While year-end holiday consumption expectations drove the growth of the consumer goods industry, stable growth of several key industries offered support for the economic operation, said Wen.
Zhang Liqun, a researcher with the Development Research Center of the State Council, said the favorable rebound showed stabilizing signs of the economy, but the foundation needs to be further consolidated.
As the downward pressure remains, efforts should be stepped up in expanding domestic needs and strengthening the stabilization, said Zhang.
Saturday’s data also showed China’s composite PMI went up 1.7 points from a month ago to 53.7, indicating faster business expansion.
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