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October manufacturing PMI at 54.7%, fed by inflation
By Wang Yanlin |
November 1, 2010, Monday
|
Online Edition
Online Edition
CHINESE manufacturing activities grew at a faster pace in October, fueled by expanding domestic demand and stable exports, two surveys showed today.
However, inflation edged up further with the production costs index rising steeply last month.
The official Purchasing Managers Index, a comprehensive gauge of industrial activities across the country, increased 0.9 percentage point to 54.7 percent in October, the China Federation of Logistics and Purchasing said.
A reading above 50 percent indicates an expansion, and the official index has been in expansion for 20 months in a row.
Meanwhile, another survey by the HSBC showed that its China Manufacturing Purchasing Managers Index also strengthened from 52.9 in September to 54.8 in October, the fastest pace since April.
While the official PMI is weighted heavily towards big domestic companies, the HSBC survey is slanted more towards privately-owned and export-oriented firms.
"Another upbeat reading suggests the strong growth momentum in domestic demand," said Qu Hongbin, chief economist at HSBC. "It warrants a 9 percent economic growth in the fourth quarter despite weak increase in new export orders."
He said the jump in product prices reflected higher production costs and heralded higher consumer prices likely to reach its cyclical peak in October.
In the HSBC survey, the seasonally adjusted input prices index surged to its highest level last month since July 2008.
However, inflation edged up further with the production costs index rising steeply last month.
The official Purchasing Managers Index, a comprehensive gauge of industrial activities across the country, increased 0.9 percentage point to 54.7 percent in October, the China Federation of Logistics and Purchasing said.
A reading above 50 percent indicates an expansion, and the official index has been in expansion for 20 months in a row.
Meanwhile, another survey by the HSBC showed that its China Manufacturing Purchasing Managers Index also strengthened from 52.9 in September to 54.8 in October, the fastest pace since April.
While the official PMI is weighted heavily towards big domestic companies, the HSBC survey is slanted more towards privately-owned and export-oriented firms.
"Another upbeat reading suggests the strong growth momentum in domestic demand," said Qu Hongbin, chief economist at HSBC. "It warrants a 9 percent economic growth in the fourth quarter despite weak increase in new export orders."
He said the jump in product prices reflected higher production costs and heralded higher consumer prices likely to reach its cyclical peak in October.
In the HSBC survey, the seasonally adjusted input prices index surged to its highest level last month since July 2008.
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