CHINA MANUFACTURING AT SIX-MONTH LOW

26-11-2014

Activity in China’s manufacturing sector has fallen to a six-month low due mainly to a fall in new export orders, according to the latest industry data.

The preliminary HSBC China Manufacturing Purchasing Managers Index (PMI) fell to 50.0 in November, compared with a final reading of 50.4 in October. A reading above 50 indicates expansion from the previous month, while a reading below 50 indicates contraction.

HSBC chief China economist Hongbin Qu said new export order growth continued to ease and led to a below-50 reading for the output sub-index for the first time since May.

"Disinflationary pressures remain strong and the labour market showed further signs of weakening. Weak price pressures and low capacity utilisation point to insufficient demand in the economy, he said.

"Furthermore, we still see uncertainties in the months ahead from the property market and on the export front."

"We think growth still faces significant downward pressures, and more monetary and fiscal easing measures should be deployed.”

The preliminary PMI figure, also called the HSBC Flash China PMI, is based on 85 per cent to 90 per cent of total responses to HSBC's PMI survey each month, and is issued about one week before the final PMI reading.

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