Business conditions in China’s manufacturing sector improved at the fastest rate for seven months in October, according to the HSBC China Manufacturing Purchasing Managers’ Index™. The index rose to 50.9, unchanged from the Flash PMI™ and up from 50.2 in September.
The PMI™ rose to a seven-month high in October, with the stronger momentum of manufacturing growth translating into the first expansion of employment since March
Chief Economist for Greater China, HSBC
Output at manufacturing plants in China increased for the third consecutive month, and at the quickest pace since April, after stronger client demand both at home and abroad.
Qu Hongbin, Chief Economist for Greater China and Co-Head of Asian Economic Research, HSBC, said: “The final HSBC China Manufacturing PMI™ rose to a seven-month high in October, with the stronger momentum of manufacturing growth translating into the first expansion of employment since March. This in turn should support private consumption growth in the coming months. China is on track for a gradual growth recovery.”
New orders and new export orders increased at faster rates, with a number of businesses citing greater demand from the US. Stocks of finished goods rose for the first time in four months, albeit slightly. The level of outstanding business increased, largely because of new order growth. Companies also recorded the fastest accumulation of work in hand since March 2011. Staff numbers increased, with some firms planning to expand output but the rate of job creation was only slight.
Average production costs increased for the third month but the rate of input price inflation eased slightly.
The PMI™ is based on a survey of purchasing executives in more than 420 manufacturing companies. An index figure above 50 signals expansion, while below 50 signals contraction.
The November Flash PMI™ is due for release on 21 November.
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