Sunday, November 18, 2012

China Manufacturing Contracts for 12th Consecutive Month: "Conditions deteriorate at marginal pace"

The HSBC China Manufacturing Flash Purchasing Managers' Index, compiled by Markit, increased +1.6 to 49.5 in October, above the 41-month low of 47.6 in August. That was the lowest since March 2009. A contraction was expected and ongoing slowdowns are projected. This is the 12th consecutive month below 50, which indicates sector contraction. The China Manufacturing PMI has been just below 50 for 15 of the past 16 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: "October’s final PMI rose to an eight-month high, implying that China’s industrial activity continues to bottom out following a modest pickup last month. This is mainly driven by the increase of new orders, thanks to the filteringthrough of the earlier easing measures, while exports outlook remains challenging. We expect a continuation of policy easing to further boost domestic demand and counterbalance the external weakness, leading to a gradual growth recovery in the coming quarters".

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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