Man­u­fac­tur­ing PMI hits a two-year high

China Daily (USA) - - TOP NEWS - By WANG YIQING wangy­iqing@chi­

China’s man­u­fac­tur­ing pur­chas­ing man­agers in­dex con­tin­ued ris­ing in Novem­ber to the high­est level in two years, which in­di­cates the coun­try’s eco­nomic per­for­mance is grad­u­ally im­prov­ing, new data showed on Thurs­day.

The PMI stood at 51.7 in Novem­ber, up from 51.2 in Oc­to­ber, ac­cord­ing to the Na­tional Bureau of Statis­tics.

This is the fourth con­sec­u­tive month that the man­u­fac­tur­ing PMI, a key gauge that mon­i­tors the ac­tiv­ity of large and medium-sized en­ter­prises in the man­u­fac­tur­ing sec­tor, stayed above the 50-point mark that dis­tin­guishes ex­pan­sion from con­trac­tion in the sec­tor.

Among the five ma­jor sub in­dexes, pro­duc­tion and new or­ders stayed in the ex­pan­sion­ary range. In Novem­ber, the pro­duc­tion subindex in­creased to 53.9 from Oc­to­ber’ s 53.3, while the new or­ders subindex in­creased to 53.2 from Oc­to­ber’s 52.8. Both were at the high­est level so far this year.

Zhao Qinghe, se­nior statis­ti­cian of the NBS, said that pro­duc­tion and mar­ket de­mand both re­bounded in Novem­ber, and en­ter­prises showed stronger de­sire to pur­chase.

Zhao said the in­creased costs of raw ma­te­ri­als and trans­porta­tion, which have reached the high­est level in three years, are a ma­jor chal­lenge for en­ter­prises.

“Fluc­tu­a­tions of the RMB ex­change rate have re­sulted in the in­creased cost of im­ported raw­ma­te­ri­als, which has a sig­nif­i­cant im­pact on elec­tronic equip­ment man­u­fac­tur­ing in­dus­tries such as com­put­ers and telecom­mu­ni­ca­tion,” Zhao added.

The Caixin/Markit Man­u­fac­tur­ing PMI, which mainly mon­i­tors the mar­ket per­for­mance of small and medi­um­sized en­ter­prises, was at 50.9 in Novem­ber. Although the in­dex stayed in the ex­pan­sion­ary range, it de­clined from 51.2 in Oc­to­ber, which shows a slow­ing ex­pan­sion pace in the man­u­fac­tur­ing sec­tor.

“Caixin/Markit In­dex read­ings for both out­put and new or­ders de­clined, but those track­ing in­put and out­put prices rose at a faster pace to hit their high­est lev­els in five years, point­ing to fur­ther in­ten­si­fi­ca­tion of in­fla­tion­ary pres­sure”, said Zhong Zheng­sheng, di­rec­tor of macroe­co­nomic anal­y­sis at CEBM Group, a sub­sidiary of Caixin In­sight Group.

“The Novem­ber PMI in­di­cates that China’s do­mes­tic eco­nomic op­er­a­tion is sta­ble and the pos­i­tive ef­fect of sup­ply side struc­tural re­form is grad­u­ally ap­pear­ing,” said Zhang Yip­ing, an econ­o­mist with China Mer­chants Se­cu­ri­ties. “The qual­ity of China’s eco­nomic growth is grad­u­ally im­prov­ing.”

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