PMI falls as exports slow

PMI falls as exports slow

PMI falls as exports slow

The FINANCIAL -- Conditions in China’s manufacturing sector dropped to a two-month low in November, according to the HSBC Flash China Manufacturing Purchasing Managers’ Index™ (PMI™). The index fell to 50.4, from 50.9 in October.

Although output and new orders increased, new export orders and stocks of purchases both fell. Employment also decreased, in a change of direction. Input prices increased, albeit at a slower rate. Despite the drop, the figure was still the second-highest reading in seven months, remaining above the crucial 50 mark. An index figure above 50 signals expansion, while below 50 signals contraction.

“China’s growth momentum softened a little in November, as the HSBC Flash China Manufacturing PMI™ moderated due to the weak new export orders and slowing pace of restocking activities,” said Qu Hongbin, Chief Economist for Greater China and Co-Head of Asian Economic Research, HSBC.

He added that the “muted inflationary pressures should enable Beijing to keep policy relatively accommodative to support growth”.

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 reached an eight-month high of 51.3, up from 51.1 in October, according to ISBC Group.

The final PMI™ for November is due for release on 2 December.