The Chinese manufacturing sector expanded for the first time in thirteen months in November, driven by a rebound in output and new export orders, the results of a preliminary survey by Markit Economics revealed Thursday.
The headline Markit/HSBC purchasing managers' index rose to 50.4 in November from 49.5 in October. This was the highest reading in 13 months.
A PMI reading above 50 indicates expansion of the sector, while a reading below 50 suggests contraction. The manufacturing output index climbed to a 13-month high of 51.3 from 48.2 in October.
New exports orders bounced back in November. However, the pace of increase in overall new orders slowed from October, suggesting weak domestic demand.
The rebound in activity after 12 months of continued deterioration confirms that "the economic recovery continues to gain momentum towards the year end," said Hongbin Qu, HSBC Chief Economist for China.
"However, it is still the early stage of recovery and global economic growth remains fragile. This calls for a continuation of policy easing to strengthen the recovery," the economist noted.
Employment at manufacturing firms contracted in November, but at a slower pace than in the previous month. Input prices rose at faster pace during the month, while output prices recorded a decline.
In a report released on Wednesday, the Conference Board said its leading indicator for China rose at a faster pace in October, suggesting that a moderate rebound is underway that may carry into the first half of 2013.
The economy slowed down in the aftermath the global financial crisis. In the third quarter, GDP expanded 7.4 percent, the weakest pace recorded since the first quarter of 2009.
However, the statistical office recently published a slew of positive data, including industrial production and retail sales, which pointed to a likely pick up in economic activity in the last quarter of 2012.
Meanwhile, the State Administration of Foreign Exchange, or SAFE, said Wednesday that it will simplify the procedures for foreign direct investment, in an attempt to boost inflows.
The move comes after data earlier this week showed FDI flows to China dropped 0.24 percent in October, marking a eleventh consecutive month of year-on-year declines.
by RTT Staff Writer
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