Saturday, October 20, 2012

China Manufacturing Slowdown Confirmed: "Sharper contraction of new export orders"

The HSBC China Manufacturing Final Purchasing Managers' Index, compiled by Markit, increased +0.3 to 47.9 in September, just above the 41-month low of 47.6 in August. That was the lowest since March 2009. New export orders plunged at the fastest rate in 42 months. A contraction was expected and ongoing slowdowns are projected. This is the 11th consecutive month below 50, which indicates sector contraction. The China Manufacturing PMI has been just below 50 for 14 of the past 15 months.

China Manufacturing PMI by Month Manufacturing began contracting, an Index reading of less than 50, in July 2011. The chart peak was 55.3 in November 2010. The PMI is a percentage - not a total.

Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, said: "Chinese manufacturing growth is likely to be bottoming out. However, the sharper contraction of new export orders and the lingering pressures on job markets mean that Beijing should step up easing to support growth and employment. Fiscal measures should play a more important role in the coming months."

China Manufacturing PMI Moving Averages The short, intermediate, and long-term trends continue downwards. The PMI is a percentage - not a total.


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