China's manufacturing growth improved
slightly in November. The official Purchasing Managers’ Index was 51.4, the
National Bureau of Statistics and China Federation of Logistics and Purchasing
said yesterday, This survey focuses on big state-owned firms while today, the
HSBC Purchasing Managers’ Index (PMI) survey showed a further improvement of
operating conditions in China’s manufacturing sector, albeit marginal. Output
and new order growth both increased at their strongest rates in eight months in
November, but renewed job shedding led to a solid increase in outstanding
business. Elsewhere in the region, there were marginal rises in India, Korea,
Indonesia, while growth was strong in Taiwan
After adjusting for seasonal factors, HSBC's China PMI
posted at 50.8 in November, up slightly from the earlier flash reading, and
little-changed from 50.9 October. Though marginal, it was the second-highest
index reading in eight months.
Production levels at Chinese manufacturers increased for
the fourth month running in November, and at the fastest rate since March.
Growth was supported by a quicker expansion of total new business. That was
despite new export orders rising at a fractional pace, suggesting that new order
growth was largely driven by domestic demand. According to anecdotal evidence,
improved business conditions and the launch of new products boosted volumes of
new work.
Despite the greater volume of new business, manufacturers
cut their staffing levels in November, reversing a slight expansion of payroll
numbers in October. That said, the rate of job shedding was only marginal, with
a number of panellists citing company down-sizing policies and the
non-replacement of voluntary leavers.
Consequently, backlogs of work continued to increase in
November. Moreover, the rate of backlog accumulation was the second-strongest in
over two years.
Purchasing activity increased over the month in response
to greater output requirements. That said, the rate of increase slowed from the
previous month to a modest pace. Conversely, stocks of purchases held by Chinese
manufacturers declined slightly in November, with a number of firms attributing
the reduction to increased production.
Average input costs faced by Chinese goods producers
increased for the fourth consecutive month, with panellists reporting higher raw
material prices across both national and international markets.
Firms chose to partially pass on their higher cost burdens
to clients in November, and raised their selling prices marginally. Moreover, it
was the weakest rate of output charge inflation in four months, with some firms
lowering their prices in an effort to boost sales.
Hongbin Qu, chief economist, China & co-head of Asian
Economic Research at HSBC said: “China’s manufacturing sector kept
relatively steady growth momentum in November, as the final manufacturing PMI
was revised up from the flash reading on the back of faster new business gains.
However, the renewed contraction of employment and the slower pace of restocking
activities call for a continuation of accommodative policy. The modest
inflationary pressures leave room to do so."
The HSBC China Report on Manufacturing is
based on data compiled from monthly replies to questionnaires sent to
purchasing executives in over 420 manufacturing companies.
Manufacturing operating conditions across India improved in November, with a return to growth of incoming new work leading companies to raise their production levels for the first time since April. Purchasing activity also rose in the latest month and job creation was sustained.
Adjusted for seasonal factors, the HSBC India Manufacturing PMI climbed from 49.6 in the previous month to 51.3 in November. Although indicative of a slight improvement in operating conditions, this was the first reading above 50.0 recorded since July.
The HSBC South Korea PMI rose marginally to 50.4 in November, up from 50.2 in October, signalling a slight improvement in operating conditions. Whilst the PMI posted only just above the 50.0 no-change mark separating growth from contraction, this was nevertheless the highest reading in six months. Output growth slowed to virtual stagnation in November, as the seasonally adjusted Index registered only fractional growth. That said, the Index posted above the 50.0 no-change mark for the second successive month, following a four-month sequence of readings signalling contraction. Respondents cited increased smartphone sales and improvements in the automobile industry due to the settlement of strikes as key drivers.
Indonesia’s manufacturing economy improved for the third successive month in November, albeit at a marginal rate. Despite a resilient domestic market and a softer decline in export demand, output contracted for the first time in three months during November. Concurrently, job cuts were recorded for the fourth month running.
Adjusted for seasonal factors, the HSBC Indonesia
PMI fell slightly from 50.9 in October to 50.3 in the latest month. While the overall rate of improvement across the manufacturing economy remained sluggish, it was broadly in line with the series’ average. Amid fears of a difficult economic climate and persistent declines in new export orders, Indonesian manufacturers reduced their production volumes in November. Although slight, the latest drop in output was the second in 10 months. New orders from abroad fell at a marginal and slower pace, but stretched the current period of contraction to six months.
November’s data signalled that operating conditions in
Taiwan’s manufacturing sector improved for the third consecutive month. Furthermore, it was the strongest rate of improvement since March 2012. Both output and new orders increased sharply over the month, amid reports of strengthened client demand. Greater volumes of new work led to a solid expansion of outstanding business in November. Meanwhile, firms increased their payroll numbers for the sixth month in a row to accommodate a further expansion of output. The latest headline PMI figure posted at 53.4, up from 53.0 in October. This signalled the strongest improvement of operating conditions in Taiwan’s manufacturing sector since March 2012.
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