HSBC's China Manufacturing PMI At 3-Month Low, Official PMI Declines In December

 
on January 01 2014 10:03 PM
ChinaManufacturing
A labourer cuts scrap steel at a factory of Dongbei Special Steel Group Co., Ltd., in Dalian, Liaoning province July 24, 2013. Reuters/China Daily

Two separate surveys released on Wednesday showed that growth in China’s manufacturing sector weakened in December compared to the previous month.

The final reading of the HSBC Manufacturing Purchasing Managers' Index, or PMI, stood at 50.5 in December, unchanged from the earlier flash reading, and down slightly from 50.8 in November. According to the survey, which is weighted toward small- and mid-sized companies, the output improved for the fifth successive month in December. However, the rate of growth eased from November’s eight-month high.                 

“The moderation of December's final HSBC China Manufacturing PMI was mainly due to slower output growth.  The recovering momentum since August 2013 is continuing into 2014, in our view,” Hongbin Qu, chief China economist at HSBC, said in a statement.

A reading above 50 indicates expansion while a reading below 50 shows contraction. The index has remained above the contraction benchmark level for the last four months.

Meanwhile, according to data released Wednesday by China's National Bureau of Statistics, activity growth in the Chinese manufacturing sector slowed unexpectedly to 51 in December, from a reading of 51.4 registered in November.

The government’s official purchasing managers’ index, or PMI, dropped by 0.4 percentage points in December after analysts had forecast a reading of 51.2, down 0.2 percentage points from November's reading.

The official PMI has been in expansion territory since July, indicating that growth in large-scale industries -- the survey is weighted toward large industries -- was picking up, but December registered the first decline in PMI since June. 

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