Manufacturing Index Defies Negative Forecasts
Despite claims that China’s economy would continue to decline, reports indicate that there has been a slight increase in manufacturing in December. Figures from the purchasing manager’s index (PMI) indicated an expansion, but the HSBC figure continues to be below fifty. The Sydney Morning Herald reports:
The December manufacturing purchasing manager’s index (PMI) was 50.3 points, up from 49 points in November, the Beijing statistics bureau announced yesterday. A figure above 50 indicates expansion.
In comparison, an index compiled by the international bank HSBC Holdings put the figure at 48.7 points, up from 47.7 points in November.
The HSBC index has been below 50 for several months, while the government figures indicate a significant improvement in activity last month.
Analysts has originally predicted that the PMI figure would be 49.1 in December. With the increased PMI, there is hope that a major economic slowdown will not occur in China. The New York Times adds:
“The rebound in the December P.M.I. shows that there will be no big slowdown in the Chinese economy,” Zhang Liqun, a researcher with the Development Research Center of the State Council, wrote in a statement accompanying the survey.
The economy faces downward pressure, but there are positive elements that could underpin growth, the researcher said.
A similar survey Friday by HSBC and Markit, a British data provider, which captures data from smaller factories, moved up to 48.7 in December from a 32-month low of 47.7 in November.
Economists at Citibank said China was more likely to take policy steps to combat what the bank saw as a tangible slowing of economic activity.