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02 Dec 2013

China maintains momentum

China maintains momentum

Chinese manufacturers’ production levels increased for the fourth month running

China’s manufacturing sector maintained relatively steady growth in November, according to the HSBC China Manufacturing Purchasing Managers’ Index™ (PMI™).

The headline index was 50.8 in November, up from the earlier flash reading of 50.4. Although slightly down from 50.9 in October, this was the second-highest reading in eight months.

The final manufacturing PMI™ was revised up from the flash reading on the back of faster new business gains

Qu Hongbin,
Chief Economist for Greater China, HSBC

Production levels at Chinese manufacturers increased for the fourth month running. Growth was supported by a quicker expansion of total new business. This was despite new export orders rising at a fractional pace, suggesting that new order growth was largely driven by domestic demand.

Staffing levels fell slightly and backlogs of work continued to increase.

Qu Hongbin, Chief Economist for Greater China and Co-Head of Asian Economic Research, HSBC, said: “China’s manufacturing sector kept relatively steady growth momentum in November, as the final manufacturing PMI™ was revised up from the flash reading on the back of faster new business gains. However, the renewed contraction of employment and the slower pace of restocking activities call for a continuation of accommodative policy. The modest inflationary pressures leave room to do so."

India’s manufacturing sector recovers

Meanwhile India, another large emerging economy, saw an improvement in manufacturing conditions in November.

The HSBC India Manufacturing PMI™ rose to 51.3 in November, from 49.6 in October. This was the first reading above 50.0 since July. New orders, output and purchasing activity all increased, and job creation was sustained.

Leif Eskesen, Chief Economist for India & ASEAN at HSBC, said: "Manufacturing activity picked up led by a rise in new domestic orders, which helped pull up output growth. Encouragingly, input and output price inflation eased, which, if sustained, could imply that the Reserve Bank of India is getting closer to the end of its tightening cycle, although it may still need to notch rates up a bit further.”

PMIs™ are based on data compiled from monthly replies to questionnaires sent to purchasing executives in manufacturing companies. A reading above 50 indicates expansion, while one below 50 signals contraction.

The intellectual property rights to the HSBC China and India Manufacturing PMI™s provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, HSBC use the above marks under license. Markit and the Markit logo are registered trade marks of Markit Group Limited.

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