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PMI posts 'upbeat reading'
By Wang Yanlin |
September 30, 2010, Thursday
|
Print Edition
Print Edition
WITH boosts in production and new business orders, Chinese manufacturing reached a five-month high in September, a key index showed yesterday.
The HSBC Purchasing Managers' Index, a comprehensive gauge of industrial activities across the country, rose to 52.9 this month, up from 51.9 in August.
A reading above 50 signals an expansion, and September's index climbed more than three points since it fell below the 50 threshold in July. The climb suggests that growth in the manufacturing sector is building, the survey's authors said.
"The upbeat reading of the HSBC PMI implies that China's growth slowdown is in check," said Qu Hongbin, chief economist at HSBC.
"Despite uncertainties on growth in global demand, we expect China ... to grow by around 9 percent in the rest of the year and 2011," Qu said.
Qu said he expected China to achieve that growth by relying on "continued investment in ongoing infrastructure projects and resilient consumption."
China's economy grew 11.1 percent from a year earlier in the first half, which got off to a fast start of 11.9 percent in the first three months, easing to 10.3 percent growth in the second quarter.
China's industrial output gained 13.9 percent year on year in August, up from July's 13.4 percent. The quickening of the pace came a bit unexpectedly after four consecutive months of slowdown.
The HSBC survey noted a rise in manufacturing production, though a moderate one. Panelists primarily attributed the growth to greater inflows of new business orders, which rose for the second month in a row. New export business also increased, though marginally. Detailed data were not immediately available.
Average input costs rose substantially in September, with the rate of inflation accelerating steeply. Respondents cited higher raw material prices as the main driver of inflation, particularly steel.
As a result, manufacturers raised their output prices on average in a bid to keep operating margins. The rate of output price inflation was sharp, and the fastest in eight months.
The result was a dip in profit growth among industrial companies.
The HSBC Purchasing Managers' Index, a comprehensive gauge of industrial activities across the country, rose to 52.9 this month, up from 51.9 in August.
A reading above 50 signals an expansion, and September's index climbed more than three points since it fell below the 50 threshold in July. The climb suggests that growth in the manufacturing sector is building, the survey's authors said.
"The upbeat reading of the HSBC PMI implies that China's growth slowdown is in check," said Qu Hongbin, chief economist at HSBC.
"Despite uncertainties on growth in global demand, we expect China ... to grow by around 9 percent in the rest of the year and 2011," Qu said.
Qu said he expected China to achieve that growth by relying on "continued investment in ongoing infrastructure projects and resilient consumption."
China's economy grew 11.1 percent from a year earlier in the first half, which got off to a fast start of 11.9 percent in the first three months, easing to 10.3 percent growth in the second quarter.
China's industrial output gained 13.9 percent year on year in August, up from July's 13.4 percent. The quickening of the pace came a bit unexpectedly after four consecutive months of slowdown.
The HSBC survey noted a rise in manufacturing production, though a moderate one. Panelists primarily attributed the growth to greater inflows of new business orders, which rose for the second month in a row. New export business also increased, though marginally. Detailed data were not immediately available.
Average input costs rose substantially in September, with the rate of inflation accelerating steeply. Respondents cited higher raw material prices as the main driver of inflation, particularly steel.
As a result, manufacturers raised their output prices on average in a bid to keep operating margins. The rate of output price inflation was sharp, and the fastest in eight months.
The result was a dip in profit growth among industrial companies.
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