China Manufacturing Expands to 19-Month High!

The HSBC China Manufacturing Purchasing Managers' Index, compiled by Markit, increased +1.0 to 51.5 in December, well above the 41-month low of 47.6 in August 2012. That was the lowest since March 2009.

This is the second consecutive month of expansion (greater than 50.0), after 12 consecutive months of contraction (less than 50.0) from November 2011 to October 2012. The China Manufacturing PMI has been just below 50 for 15 of the past 18 months.

China Manufacturing PMI by Month Manufacturing began contracting, an Index reading of less than 50, in July 2011. Manufacturing has now been expanding since October 2012. 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: "December’s final manufacturing PMI picked up for the fourth consecutive month to a 19 month high, thanks to the faster new business flows and the end of destocking. Such a momentum is likely to be sustained in the coming months when infrastructure construction runs into full speed and property market conditions stabilise. This, plus Beijing’s reiteration of keeping pro-growth policy in place into the coming year, should support a modest growth recovery of around 8.6% y-o-y in 2013, despite the ongoing external headwinds."

China Manufacturing PMI Moving Averages The short, intermediate, and long-term trends have reversed and are now rising. The PMI is a percentage - not a total.



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China LEI Increases: "Economic rebound still appears fragile"

The Conference Board: China Monthly Leading Economic Index

China Monthly LEI

The current November 2012 reading is a post-recession high.



“Strength in China’s current economic activity has been maintained in November and all of the components in the Coincident Economic Index now posted gains,” says Andrew Polk, resident economist at The Conference Board China Center in Beijing. “However, growth in the leading index decelerated slightly as real estate activity, consumer confidence and new export orders all contributed less to LEI growth in November than in October. Credit creation in the banking system remains the only consistent positive contributor to the LEI since early 2011. As a result, the sustainability of a broad based economic rebound still appears fragile heading into 2013.”

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China Manufacturing Expands to 14-Month High

The HSBC China Manufacturing Flash Purchasing Managers' Index, compiled by Markit, increased +0.4 to 50.9 in December, well above the 41-month low of 47.6 in August 2012. That was the lowest since March 2009. This is the second expansion (greater than 50.0) since October 2011 (51.0). There had been 12 consecutive month below 50, which indicates sector contraction, from November 2011 to October 2012. The China Manufacturing PMI has been just below 50 for 15 of the past 17 months.

China Manufacturing PMI by Month Manufacturing began expanding, an Index reading of greater than 50, in November 2012. The chart peak was 55.3 in November 2010. The PMI is a percentage - not a total.



HongbinAs December flash manufacturing PMI picked up further to a 14 month high, it confirmed that China's ongoing growth recovery is gaining momentum mainly driven by domestic demand conditions. However, the drop of new export orders and the downside surprise of November exports growth suggest the persisting external headwinds. This calls for Beijing to keep an accommodative policy stance to counter-balance the external weakness, provided inflation stays benign”

China Manufacturing PMI Moving Averages The short, intermediate, and long-term trends have reversed and are now rising. The PMI is a percentage - not a total.



The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) is published on a monthly basis approximately one week before final PMI data are released, making the HSBC PMI the earliest available indicator of manufacturing sector operating conditions in China. The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data.

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China Manufacturing Rebounds in November

The HSBC China Manufacturing Purchasing Managers' Index, compiled by Markit, increased +1.0 to 50.5 in November, well above the 41-month low of 47.6 in August 2012. That was the lowest since March 2009. This is the first expansion (greater than 50.0) since October 2011 (51.0). There had been 12 consecutive month below 50, which indicates sector contraction, from November 2011 to October 2012. The China Manufacturing PMI has been just below 50 for 15 of the past 17 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: "The final November manufacturing PMI stood at a 13-month high of 50.5 on increasing new business and expanding production. This confirms that Chinese economy continues to recover gradually. We expect GDP growth to rebound modestly to around 8% in 4Q as the easing measures continue to filter through.”

China Manufacturing PMI Moving Averages The short, intermediate, and long-term trends have reversed and are now rising. The PMI is a percentage - not a total.



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