| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

We provide access to live business television and business related videos from: Bloomberg TV; The Wall Street Journal; CNBC and the Financial Times. Click image:

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax 2008

Climate Change Reports

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : International Last Updated: Apr 24, 2009 - 5:31:05 PM


Chinese manufacturing output fell sharply in October; Japan's PMI fell to 7-year low and India's PMI also declined
By Finfacts Team
Nov 3, 2008 - 6:48:58 AM

Email this article
 Printer friendly page

China - - Source: Markit Economics

Chinese manufacturing output fell sharply in October according to Purchasing Managers' Index (PMI) survey data published today. Japan's PMI fell to near 7-year low according to data published last Friday. India's PMI survey results, which were published today, also show a decline in the PMI.

China's Manufacturing

October’s survey data indicated that operating conditions within the Chinese manufacturing sector deteriorated for a third consecutive month. The headline CLSA PMI recorded 45.2, down from 47.7 in September, to register a new survey record low.

Chinese manufacturing output contracted at the most marked rate in the survey history in October and for the third month in succession. Survey participants generally attributed falling output levels to declining new order volumes and stagnant market conditions.

The level of incoming new orders received by Chinese manufacturing firms fell at the steepest rate in the series history in October, reflecting sluggish demand conditions and an uncertain economic outlook. Although not as severe as the decline in total new business, export sales fell at a series record pace during the latest survey period.

Staffing levels at firms operating in the Chinese manufacturing sector fell at a series record pace in October. Firms began to lay-off workers in response to stuttering demand and deteriorating economic conditions.

Having increased at a survey record rate in July, average input costs fell sharply during October.

According to the latest data, input cost deflation was the most marked since the inception of the series. Stagnant global market conditions and falling oil prices were reported to have depressed costs. Average prices charged by Chinese manufacturers fell for a second successive month in October and at the sharpest rate in the survey history. Adverse demand conditions, reflecting current turmoil in financial markets, were cited as a key factor undermining manufacturers’ pricing power.

Commenting on the China Manufacturing PMI survey, Eric Fishwick, Head of Economic Research at Hong Kong brokerage CLSA said: “The very sharp fall in the October PMI confirms that China is more integrated into the global economy than ever. Chinese manufacturers are seeing their order books cut, both at home and abroad, as the world economy falls into recession. Costs are falling but so are output prices. The coming twelve months will be difficult ones for manufacturers, China included.”

The CLSA China Report on Manufacturing is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 industrial companies. The panel is stratified geographically and by Standard Industrial Classification (SIC) group, based on the regional and industry contribution to Chinese Industrial production.

Japan - - Source: Markit Economics

Japan's Manufacturing

October’s seasonally adjusted Nomura/JMMA Japanese Manufacturing PMI remained below the critical 50.0 no-change mark for an eighth month in succession in October to signal a further deterioration of operating conditions in the Japanese manufacturing sector. The headline index posted its lowest level in nearly seven years, registering 42.2, down from 44.3 in September.

Japanese manufacturing output contracted at the most marked rate since December 2001 in October and for the eighth month in succession. Survey respondents indicated that declining new order volumes and stagnant operating conditions had contributed to the latest decline in production.

Latest survey data indicated that volumes of incoming new business fell at the second-sharpest rate in the survey history, reflecting adverse demand conditions and an uncertain economic environment. In line with total new orders, Japanese exporters registered a series-record decline in new work from abroad in October.

Companies generally attributed the latest fall to sluggish demand conditions in overseas markets as the fallout from the global financial crisis continued. Input cost inflation remained strong in October, albeit the least marked since May 2007. Where a rise in input costs was recorded, it was generally attributed to higher raw material prices, with steel and petroleum mentioned in particular.

Average output charges rose for the fourteenth successive month in October, albeit at the weakest pace since June. Reasons provided by survey participants linked the latest rise in factory-gate prices primarily to efforts to protect profit margins following a robust increase in operating costs.

Lower new work allowed manufacturers to reduce levels of work-in-hand (but not yet completed) in October. In fact, the rate of backlog clearance was the most marked since December 2001. Firms signalled that excess capacity was a key contributor to the latest fall.

Employee numbers at Japanese manufacturers fell for the third consecutive month during the latest survey period and at the sharpest rate since February 2003. Several companies indicated that they had been prompted to lay-off workers in response to lower workloads.

Levels of purchasing activity decreased at the fastest rate since January 2002 during the latest survey period, as companies reduced their input buying in response to lower workloads.

Commenting on the Nomura/JMMA Japan Manufacturing PMI data, Alex Hamilton, Economist at Markit said: “Operating conditions in the Japanese manufacturing sector deteriorated further in October, driven by poor demand and bleak economic prospects. Production and new orders both fell markedly, while firms began to lay-off staff in response to declining production requirements.

New export orders declined at a rapid pace during the latest survey period, which suggests significant downward effects on Japan’s export-led economy in the months ahead. Moreover, recent disarray in financial markets and the ensuing global chaos appears to be leading the manufacturing industry down the road to protracted recession.”

India - - Source: Markit Economics

India Manufacturing

Business conditions in India’s manufacturing sector continued to improve in October, but at a far weaker rate than they have over the past year. At 52.2, down sharply from 57.3 in September, the seasonally adjusted ABN AMRO India Purchasing Managers’ Index (PMI) – a composite indicator designed to provide a single figure snap-shot of the performance of the manufacturing industry – fell to a survey low.

The solid decline in the level of the PMI was underpinned by noticeably slower growth in output, total new orders, and employment, combined with the first fall in stocks of purchases in the history of the survey.

Growth of total incoming new work to the Indian manufacturing economy lost considerable momentum in October. Although there remained strong demand in the domestic market, global financial and affected foreign demand for Indian manufactured goods. New export orders fell, albeit only slightly, for the first time in the series history. As a result, the latest expansion of production was perceivably weaker, and the slowest since the survey was first started in April 2005.

As growth of total incoming new work slowed, spare capacity became more available, allowing manufacturers to deplete volumes of outstanding business for the first time in three months and at a moderate pace. Meanwhile, lower production demands caused employment growth to stagnate, with the majority of the survey panel noting no change in staffing levels on the month.

Subdued demand for inputs helped average vendor performance, which improved for the first time in four months. Anecdotal evidence suggested that improved efficiency at suppliers had also reduced lead-times.

Falling global demand for certain raw materials and fuels contributed to sharp reductions in input and output price inflation in the Indian manufacturing industry during October. This was particularly notable in the case of input cost inflation, which eased to the slowest in the series history.

Alongside good domestic demand, slower input cost inflation supported the latest rise in purchasing activity at Indian manufacturers, although the expansion was far weaker than in September. The increase was not, however, sufficient to build-up inventories of pre-production goods, which fell marginally and for the first time since the survey began. Panellists reported that fragile global economic conditions had influenced the decision to satisfy production from existing stocks. The same decision was applied to existing inventories of finished goods, which were depleted to meet current demand.

Commenting on the latest survey findings, Gaurav Kapur, Senior Economist, India, ABN AMRO N.V. said: “The strength of manufacturing sector activity deteriorated significantly in the month of October. The headline PMI slipped to its lowest level in the history of the survey, falling from 57.3 in the previous month to 52.2 in October. That indicates a sharp deceleration in the activity levels. Output and new orders subcomponents also registered their lowest readings over the 43-month old survey. Both indices printed above 50, suggesting expansion of both output and demand.

However, the fact that they dipped sharply in October, points towards a challenging business and macroeconomic environment.

“While local demand moderated, external demand shrunk. The new export orders index slipped below 50, as a number of India's key export destinations are on the verge of recession. This considerable slowdown in the new incoming business is a leading sign that, going forward, activity in this sector is likely to see muted growth.

“Survey details also indicate that inflationary pressures eased further, with both input and output price indices falling sharply over the month. Overall the outlook for the manufacturing sector appears to be bleaker in the backdrop of tough local and global economic conditions.”

Related Articles
Related Articles


© Copyright 2009 by Finfacts.com

Top of Page

International
Latest Headlines
Wednesday newspaper review: December 17, 2014
Tuesday newspaper review: December 16, 2014
Monday Newspaper Review - Irish Business News and International Stories - - December 08, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 28, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 27, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 25, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 21, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 20, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 19, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 18, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 17, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 14, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 13, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 12, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 11, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 06, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 04, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 03, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 31, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 30, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 29, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 28, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 24, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 22, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 21, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 20, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 17, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 16, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 15, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 13, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 09, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 08, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 07, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 06, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 02, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 01, 2014
Monday Newspaper Review - Irish Business News and International Stories - - September 29, 2014
Friday Newspaper Review - Irish Business News and International Stories - - September 26, 2014