China Manufacturing Rises to 2-Year High!

The HSBC China Manufacturing Flash Purchasing Managers' Index, compiled by Markit, increased +0.4 to 51.9 in January 2013, the highest since January 2011 (54.5).

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.
PMI > 50.0 is expansion, PMI < 50.0 is contraction



Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & CoHead of Asian Economic Research at HSBC said: “At 51.9, January’s HSBC China manufacturing PMI rose for the fifth consecutive month to the highest level in two years, heralding a good start to the New Year. Thanks to the continuous gains in new business, manufacturers accelerated production by additional hiring and more purchases. Despite the still tepid external demand, the domestic-driven restocking process is likely to add steam to China's ongoing recovery in the coming months.”

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.
PMI > 50.0 is expansion, PMI < 50.0 is contraction



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 LEI Increases: "Momentum may already be abating"

The Conference Board: China Monthly Leading Economic Index

China Monthly LEI

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



“Growth in the LEI for China slowed in December. A decline in real estate activity, a drop in new export orders, and weak consumer confidence accounted for the slowing, while credit extension and improved conditions in the manufacturing supply chain offered only little support,” says Andrew Polk, resident economist at The Conference Board China Center in Beijing. “Growth in the CEI moderated as well, underscoring the notion that economic momentum may already be abating, and is unlikely to rebound much further in 2013. We expect China to grow at 7.5 percent this year, slightly down from the 7.8 percent increase in 2012.”

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China Services Sector Expands

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China Manufacturing PMI, Services NMI, and Composite PMI by Month
PMI > 50.0 is expansion, PMI < 50.0 is contraction



Hongbin Qu, Chief Economist, China Co-Head of Asian Economic Research at HSBC, said: "Despite the moderation of December’s headline services PMI, the underlying strength of services sectors improved in terms of stronger new business flows and employment growth. This, plus the further pick-up of manufacturing growth, suggests that China is on track for achieving around 8% y-o-y GDP growth recovery in 4Q".

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