Econintersect: The HSBC Markit Flash China Manufacturing PMI moved slightly higher in October to 50.4, up from 50.2 in September. Both readings are just higher than 50 which marks the boundary between expansion and contraction of China’s manufacturing sector. The October reading is also above those for August (50.2) and July (50.3). However, Econintersect doubts that there is a statistically significant difference between the readings over the past four months. But there was a significant decrease in output which showed its fifth month of decline to 50.7, down from 51.3 in September and from an 18-month high of 52.8 in July.
The following summary was provided by Markit:
Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC commented on the latest data emphasis added by Econintersect):
“The HSBC China Manufacturing PMI improved to 50.4 in the flash reading for October, up from 50.2 in the final reading for September. Domestic as well as external demand showed some signs of slowing although both remained in expansion territory. Disinflationary pressures intensified, as both the input and output price indices declined further. Meanwhile both employment and inventory indices improved. While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand. This warrants further policy easing and we expect more easing measures on both the monetary as well as fiscal fronts in the months ahead.”
- HSBC Flash China Manufacturing PMI™: Slowest expansion of output in five months (Press release, Markit, 23 October 2014)
- China factory activity at 3-month high in October (CNBC, 22 October 2014)