Domenica, 04 Dicembre, 2016

China manufacturing activity expands more than expected in November: official PMI

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Remigio Civitarese | 02 Dicembre, 2016, 13:17

The manufacturing growth slowed sharply in November after demonetisation but stills remains in the positive territory, according to a monthly survey.

The closely-watched Markit/CIPS UK Construction purchasing managers' index (PMI) rose to 52.8 last month, up from 52.6 in October, and above economists' expectations of 52.2. The Markit/Nikkei November PMI slipped 0.1 points to a seasonally-adjusted 51.3, well above the 50 level that separates economic growth from contraction.

"The latest PMI data indicate a solid and broad-based recovery for the manufacturing industry", buoyed by demand for all Taiwanese products, not just components for Apple Inc devices, CIER president Wu Chung-shu (吳中書) said.

Meantime, a similar report from financial information services provider IHS Markit showed manufacturing last month had the strongest growth rate for new orders since March 2015.

Official figures show manufacturing output fell by 0.9 per cent in the third quarter of the year, while the overall economy grew by 0.5 per cent.

"One factor contributing to the downward movement in the PMI was a softer expansion in new business inflows".

"However, whereas some may have anticipated an outright downturn, the sector held its ground and remained in expansion mode".

ISM's report showed that manufacturing production and new orders improved in November, while employment slipped. The rate of inflation was the fastest for more than five and a half years, Markit said - overwhelmingly linked to supplier price hikes in response to weak sterling.

China's giant manufacturing sector is enjoying its best conditions in two years, helped by a surge in lending and a weaker currency, even as early signs of credit tightening begin to emerge.

Purchasing of raw materials and semi-finished goods by the country's producers continued to increase in November.

"Higher prices were reported for a number of materials including bricks, blocks and slate, as businesses struggled with managing costs".

"The drop in post production stocks was mainly linked by respondents to a slower expansion of output, while the accumulation in stocks of purchases was associated with buying activity growth", the statement said. However, 84% of manufacturers offering a reason for higher purchase prices made at least some reference to rising import costs due to the exchange rate. The dollar rose as investors bet that higher interest rates and inflation were coming.

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