Manufacturing could be at 2-year high this month
By Wang Yanlin |
January 25, 2013, Friday
|
Print Edition
Print Edition
China's manufacturing activities may have grown at its fastest pace in two years this month thanks to more orders amid a strengthening economy, an HSBC survey showed yesterday.
The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest available indicator of the industrial sector's vitality, climbed to 51.9 in January, up from 51.5 in December.
A reading above 50 is expansion, and it would be the third consecutive month that the index, slanted toward private and export-oriented firms, has pointed to expansion.
Qu Hongbin, chief economist for China at HSBC Holdings Plc, said: "Thanks to the continuous gains in new business, manufacturers accelerated production by additional hiring and more purchases. Despite still tepid external demand, the domestic-driven restocking process is likely to add steam to China's ongoing recovery in the coming months."
The component indexes under the HSBC Flash PMI showed that output, new orders and employment all improved this month to hover above 50.
The output index climbed to a 22-month high while that for employment was at its highest since May 2011.
"Although there still exist many uncertainties, business sentiment is stronger," said Li Maoyu, an analyst at Changjiang Securities Co. "Manufacturers are seeing the pickup of economic growth as reasons to expand production."
China's economic growth accelerated to 7.9 percent in the fourth quarter of last year, ending a seven-quarter slowdown after the government relaxed its monetary policy and fast-tracked some major investment projects.
Earlier this week, the government also announced plans to encourage mergers in nine industries to improve efficiency and enhance competitiveness.
One of those industries, vehicle manufacturing, will see 90 percent of China's vehicles coming under the control of its top 10 companies by 2015, and five auto centers will be formed.
Such changes have encouraged financial institutions to be more positive about China's economy this year.
Bank of Communications estimated that the country's growth can return to 8.5 percent this year, higher than other estimates ranging from 7.9 to 8.2 percent.
However, China may continue to be affected by the faltering global economy and a cooling domestic property market, according to some analysts.
"Although exports increased at a surprisingly fast pace of 14.1 percent in December, we need time to test its sustainability as the European Union has not produced a cure to its debt crisis," said Xue Jun, an analyst at CITIC Securities Co.
The HSBC Flash China Manufacturing PMI is an estimate of the final data to be released on February 1. It is based on approximately 85 to 90 percent of total PMI survey responses to give a preliminary indication of the final HSBC PMI data.
The official Purchasing Managers' Index, compiled by the China Federation of Logistics and Purchasing, weighted more toward state-owned enterprises, was 50.6 in December, the same as in November.
The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest available indicator of the industrial sector's vitality, climbed to 51.9 in January, up from 51.5 in December.
A reading above 50 is expansion, and it would be the third consecutive month that the index, slanted toward private and export-oriented firms, has pointed to expansion.
Qu Hongbin, chief economist for China at HSBC Holdings Plc, said: "Thanks to the continuous gains in new business, manufacturers accelerated production by additional hiring and more purchases. Despite still tepid external demand, the domestic-driven restocking process is likely to add steam to China's ongoing recovery in the coming months."
The component indexes under the HSBC Flash PMI showed that output, new orders and employment all improved this month to hover above 50.
The output index climbed to a 22-month high while that for employment was at its highest since May 2011.
"Although there still exist many uncertainties, business sentiment is stronger," said Li Maoyu, an analyst at Changjiang Securities Co. "Manufacturers are seeing the pickup of economic growth as reasons to expand production."
China's economic growth accelerated to 7.9 percent in the fourth quarter of last year, ending a seven-quarter slowdown after the government relaxed its monetary policy and fast-tracked some major investment projects.
Earlier this week, the government also announced plans to encourage mergers in nine industries to improve efficiency and enhance competitiveness.
One of those industries, vehicle manufacturing, will see 90 percent of China's vehicles coming under the control of its top 10 companies by 2015, and five auto centers will be formed.
Such changes have encouraged financial institutions to be more positive about China's economy this year.
Bank of Communications estimated that the country's growth can return to 8.5 percent this year, higher than other estimates ranging from 7.9 to 8.2 percent.
However, China may continue to be affected by the faltering global economy and a cooling domestic property market, according to some analysts.
"Although exports increased at a surprisingly fast pace of 14.1 percent in December, we need time to test its sustainability as the European Union has not produced a cure to its debt crisis," said Xue Jun, an analyst at CITIC Securities Co.
The HSBC Flash China Manufacturing PMI is an estimate of the final data to be released on February 1. It is based on approximately 85 to 90 percent of total PMI survey responses to give a preliminary indication of the final HSBC PMI data.
The official Purchasing Managers' Index, compiled by the China Federation of Logistics and Purchasing, weighted more toward state-owned enterprises, was 50.6 in December, the same as in November.
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