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China Manufacturing Retains Growth Momentum In November

china 021213

China's manufacturing activity maintained relatively steady growth momentum in November, two separate surveys of company purchasing managers have revealed.

Final results of the survey by Markit Economics and HSBC showed that the purchasing managers' index, a gauge of the factory sector performance, posted 50.8 in November, little changed from October reading of 50.9.

This, however, was higher than the November's flash reading of 50.4, due to faster-than-estimated new business gains. A PMI reading above 50 indicates expansion of the sector.

The official survey released by the China Federation of Logistics and Purchasing (CFLP) and the National Bureau of Statistics revealed Sunday that activity expanded at a steady pace in November supported by increased production.

The official purchasing managers index recorded a reading of 51.4 in November, unchanged from October's 18-month high. Production and export orders rose at a faster pace, while new order growth moderated.

The Markit/HSBC survey revealed that manufacturing production and total new orders increased at the fastest rates for eight months in November. At the same time, new export orders expanded at fractional pace, suggesting that new order growth was largely driven by domestic demand.

Despite the greater volume of new business, manufacturers cut their staffing levels in November, reversing a slight expansion of payroll numbers in October, Markit said. The CFLP survey also suggested continued contraction in employment, albeit at a slower pace than in October.

"Renewed contraction of employment and the slower pace of restocking activities call for a continuation of accommodative policy," HSBC Chief Economist Hongbin Qu said. "The modest inflationary pressures leave room to do so," he added.

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