Asia Economy
China's manufacturing output contracted in November; Japan's accelerated
By Finfacts Team
Nov 20, 2014 - 8:16 AM

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China's manufacturing output contracted for the first time in six months in November while Japan's manufacturing production growth accelerated to an eight-month high in the month.

The Flash China Manufacturing PMI (purchasing managers' index) was at 50.0 (the no-change level) in November (50.4 in October) which is a six-month low while the Flash China Manufacturing Output Index at 49.5 in November (50.7 in October) - seven-month low.

Data was collected 12–18 November 2014 and the HSBC Flash China Manufacturing PMI is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data. November final PMI data will be released on 1 December 2014.

Hongbin Qu, chief economist, China & co- head of Asian Economic Research at HSBC said: "The HSBC China Manufacturing PMI moderated to a six-month low of 50.0 in the flash reading for November, down from the October final reading of 50.4. New export order growth continued to ease and led to a below-50 reading for the output sub-index for the first time since May. Disinflationary pressures remain strong and the labour market showed further signs of weakening. Weak price pressures and low capacity utilization point to insufficient demand in the economy. Furthermore, we still see uncertainties in the months ahead from the property market and on the export front. We think growth still faces significant downward pressures, and more monetary and fiscal easing measures should be deployed."

The Flash Japan Manufacturing PMI was at 52.1 (52.4 in October). There was a moderate improvement in business conditions in November and the Flash Japan Manufacturing Output Index was at 53.5 (51.3) in October as output growth accelerated to fastest pace since March.

Amy Brownbill, economist at Markit, which compiles the survey said: “November data signalled positive growth in operating conditions for Japanese manufacturers, with production rising to the sharpest degree since March. In line with a rise in output was a modest increase in new orders for the sixth month in a row, albeit at a slightly weaker rate than October’s high.

“The postponement of the further increase in sales tax to 10% could provide some support for Japanese goods producers, although the outlook is unusually uncertain.”

Separately, after the report of a contraction in third quarter Japanese output, it was also reported today that the value of Japan's October exports was up 9.6% year-on-year with the benefit of a 10% rise in the value of the yen compared with the US dollar.


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