China’s manufacturing industry grew at its fastest rate for 14 months, according to HSBC’s latest Flash Purchasing Managers’ Index™. The headline figure of 50.9 compares to 50.5 in November, suggesting manufacturers are enjoying more favourable operating conditions as 2012 comes to an end. Until October, the industry had suffered 12 months of contraction.
Despite the positive figure, new export orders were weaker, slipping below 50, the level that signifies an industry shrinking or growing.
Qu Hongbin, HSBC’s Chief Economist for Greater China, says that domestic growth is helping offset some of the weaknesses that still exist in the export markets.
“China’s ongoing growth recovery is gaining momentum mainly driven by domestic demand conditions,” he says, adding that he expects Beijing to continue to pursue policies aimed at counter-balancing the weaknesses.
HSBC’s PMI™ is compiled using the views of senior purchasing executives in more than 420 manufacturing companies and is seen as a key indicator to the health of the industry.
Other economies are also suffering from weak export demand. Brazil’s November PMI™ revealed manufacturers suffered falls in export orders every month since April 2011.
However, the headline figure showed a healthy growth – rising from 50.2 in October to 52.2 last month because of rising output. Andre Loes, HSBC’s Chief Economist for Brazil, says November’s PMI™ suggests conditions are improving for Latin America’s largest economy.
“The results reinforce our view that the cyclical rebound expected for the end of 2012 is finally materialising.”
India’s exporters are among those who have been able to maintain strong growth throughout 2012. New export orders in November’s PMI™ came in at 56.2, helping lift the headline figure to 53.7, up from 52.9 in October.
The country’s manufacturers have had 44 consecutive months of output growth despite persistent power shortages affecting the industry’s capabilities.
A more complete picture of how the year ended for many economies will come when December’s PMIs are released at the beginning of 2013.