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November PMI expected to weaken sharply
By Wang Yanlin |
November 23, 2011, Wednesday
|
Online Edition
Online Edition
CHINA'S manufacturing activities may weaken sharply in November because of reductions in both domestic and external demand, a preliminary reading of the HSBC Purchasing Managers' Index showed today.
The HSBC Flash PMI, the earliest available indicator of the industrial sector's operating conditions, dropped to a 32-month low of 48 this month, down from the final reading of 51 in October.
A reading below 50 indicates a contraction of manufacturing activities, while readings above that level point to expansion.
"The dipping headline manufacturing PMI implies that industrial production is likely to slow further to around 12 percent year-on-year in the coming months," said Qu Hongbin, chief economist for China at HSBC.
"This is mainly due to cooling domestic demand while external demand is set to weaken despite still-resilient new export orders."
Qu noted inflation was likely to decelerate at a faster-than expected pace, and this would leave more room for China to step up selective easing measures, which should gradually filter through to keep China on track for a soft-landing.
The HSBC Flash PMI is published about one week before the final PMI data is released. It is based on more than 85 percent of total PMI survey responses and is designed to provide an accurate indication of the final data.
The HSBC Flash PMI, the earliest available indicator of the industrial sector's operating conditions, dropped to a 32-month low of 48 this month, down from the final reading of 51 in October.
A reading below 50 indicates a contraction of manufacturing activities, while readings above that level point to expansion.
"The dipping headline manufacturing PMI implies that industrial production is likely to slow further to around 12 percent year-on-year in the coming months," said Qu Hongbin, chief economist for China at HSBC.
"This is mainly due to cooling domestic demand while external demand is set to weaken despite still-resilient new export orders."
Qu noted inflation was likely to decelerate at a faster-than expected pace, and this would leave more room for China to step up selective easing measures, which should gradually filter through to keep China on track for a soft-landing.
The HSBC Flash PMI is published about one week before the final PMI data is released. It is based on more than 85 percent of total PMI survey responses and is designed to provide an accurate indication of the final data.
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