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23 Jan 2014

Flash PMI at six-month low

Flash PMI at six-month low

New orders decreased, according to the HSBC Flash China Manufacturing PMI™

China’s manufacturing sector hit a six-month low in January, according to the HSBC Flash China Manufacturing Purchasing Managers’ Index™ (PMI™). The index fell to 49.6, from 50.5 in December.

The last time it dropped below 50, signalling a contraction in the sector, was in July when the final PMI™ fell to 47.7.

The marginal contraction of January’s headline HSBC Flash China Manufacturing PMI™ was mainly dragged by cooling domestic demand conditions

Qu Hongbin,
Chief Economist for Greater China, HSBC

Output increased, but at a slower rate, the Flash PMI™ showed. New orders and new export orders both decreased. Employment fell, at a faster rate, while backlogs of work dropped, in a change of direction.

Qu Hongbin, Chief Economist for Greater China and Co-Head of Asian Economic Research, HSBC, said: “The marginal contraction of January’s headline HSBC Flash China Manufacturing PMI™ was mainly dragged by cooling domestic demand conditions. This implies softening growth momentum for manufacturing sectors, which has already weighed on employment growth. As inflation is not a concern, the policy focus should tilt towards supporting growth to avoid repeating growth deceleration seen in 1H 2013.”

The Flash PMI™ is the earliest available indicator of operating conditions in China. It is published around a week before the final PMI™ data is released and is based on around 85 per cent to 90 per cent of total PMI™ survey responses.

The Flash China Manufacturing Output Index fell to a three-month low in January. The index was 51.3, down from 51.4 in December.

January’s final PMI™ is due for release on 30 January 2014.

The intellectual property rights to the HSBC Flash China Manufacturing PMI™ 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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