China manufacturing PMI improves in November

China's factory activity improves in November

Manufacturing growth picks up in November, new orders rise, survey shows, BY GEORGE GEORGIOPOULOS | Kathimerini

IHS Markit's Purchasing Managers' Index (PMI) for manufacturing, which accounts for about a fifth of the economy, rose slightly for the second consecutive month to a five-month high reading of 44.1. One of the major pushes of new orders is that infrastructure investment has moved from the investment stage to the production stage.

While a measure of demand - the new orders sub-index - rose to 52.0 from 51.3 in October, a sub-index measuring hiring by factories went below the breakeven point for the first time since March past year.

The manufacturing PMI - derived from indicators for new orders, output, employment, suppliers' delivery times and stocks of purchases - is a composite single-figure indicator of manufacturing performance.

A batch of gloomy data, including weak October exports and retail sales, have painted a dark picture for the economy after figures last month showed growth almost stalled in the third quarter.

ING economist Iris Pang said: "We expected some improvement in domestic new orders, but the data has surprised us by coming earlier than our expectations". Employment decreased for the eighth straight month, with the steepest pace of job losses since September 2012.

Tombs adds that while the sector might be seeing some improvements, 2020 should remain a challenging year.

"The manufacturing sector likely will miss out on any rally in economic activity driven by a reduction in political risks in the first half of next year, given the threat that manufacturers will have to export under WTO terms from the end of 2020". Overseas firms will be wary of sourcing components from United Kingdom suppliers, given the risk that the supply chain could fail in January 2021.

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