Manufacturing growth in China is picking up speed as operating conditions improve at the quickest pace in two years, according to HSBC’s latest Flash Purchasing Managers’ Index™. The headline figure of 51.9 in January represents a 24-month high and is the earliest available indicator of manufacturing conditions in China.
The latest figure is an improvement from the final PMI™ figure of 51.5 in December.
Despite the still
tepid external demand, the domestic-driven restocking process
is likely to add steam
to China's ongoing recovery in the
Greater China, HSBC
Output, employment and purchases all increased at a faster rate; new orders increased at a slower rate; and new export orders increased, in a change of direction. The Flash China Manufacturing Output Index rose from 51.9 in December to 52.2, a 22-month high. Any figure above 50 shows manufacturing growth, while below 50 signals contraction. The Flash PMI™ suggests momentum has been carried into 2013 after a strong upturn since November compared to the earlier months of 2012.
Qu Hongbin, Co-Head of Asian Economic Research and Chief Economist, Greater China, said: “At 51.9, January’s HSBC China Manufacturing Flash 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.”
HSBC’s China Manufacturing PMI™ is due on Friday, 1 February.
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