China’s PMI figures reflect a mixed picture
Print Edition
China’s manufacturing activity in private and export-oriented companies grew at a slightly slower pace in November while that in state-owned enterprises was flat, a survey showed yesterday.
The results pointed to a stable growth momentum in China’s manufacturers, according to analysts.
The HSBC Purchasing Managers’ Index, which measures operating conditions in largely private companies, rose to 50.8 in November from the earlier flash reading of 50.4, but easing a bit from 50.9 in October, according to HSBC Holdings Plc.
A reading above 50 means expansion.
Meanwhile, the official PMI, released on Sunday by the China Federation of Logistics and Purchasing, was flat at 51.4 in November.
Qu Hongbin, chief economist for China at HSBC, said the growth momentum in the domestic manufacturing sector remained relatively steady as the final manufacturing PMI figure was better than the flash reading due to faster new business gains.
“However, the renewed contraction of employment and the slower pace of restocking activities call for a continuation of an accommodative policy,” Qu said.
The survey report revealed that production and new orders rose at their strongest rates in eight months in November, but new export orders only grew fractionally.
Manufacturers also laid off staff last month, reversing a slight rise in payroll numbers in October.
Purchasing activity gained over the month in response to greater output requirements, the report added.
Zhu Haibin, chief economist for China at JPMorgan, said economic activity was strong in the third quarter, but growth pace eased going into November.
“It appears that the business has turned somewhat cautious after a strong recovery in the third quarter, as the inventory restocking cooled modestly,” Zhu said.
Zhang Zhiwei, an economist at Nomura, said although the final reading of the HSBC PMI beat consensus expectations, the outlook was not quite rosy.
“We maintain our view that China’s economic growth has peaked in the third quarter and will slow to 7.5 percent in the fourth quarter and 6.9 percent in 2014,” Zhang said.
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