Chinese Manufacturing Remains Dismal to Start 2012
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The HSBC flash manufacturing purchasing managers index, also known as an early indicator of China’s industry activity, Thursday came in at 48.8 for the month of January, a 0.1 increase from December’s figure.
The reading has now come in below the 50 level for seven months; this represents continued contraction. Some sub-indexes, such as new export orders, backlogs of work and stocks of finished goods, did show signs of improvements
Weakening demand from Europe and the U.S. is evident as the new export orders sub-index bounced to 51.1 from a three-month low. New margins also reached a new three-month high while still being unable to pop the 50 level.
Many economists are forecasting another quarter of weakening Chinese GDP growth for the first quarter of 2012 as others believe the year will show the slowest annual growth in over a decade, reports CNBC.
Qu Hongbin, chief China economist at HSBC said, “Despite the upside surprise of industrial production growth in December, the ongoing slowdown of investment and exports implies more headwinds to growth and likely destocking pressures for manufacturers in the coming months. We expect more policy easing to stabilize growth."
The reading has now come in below the 50 level for seven months; this represents continued contraction. Some sub-indexes, such as new export orders, backlogs of work and stocks of finished goods, did show signs of improvements
Weakening demand from Europe and the U.S. is evident as the new export orders sub-index bounced to 51.1 from a three-month low. New margins also reached a new three-month high while still being unable to pop the 50 level.
Many economists are forecasting another quarter of weakening Chinese GDP growth for the first quarter of 2012 as others believe the year will show the slowest annual growth in over a decade, reports CNBC.
Qu Hongbin, chief China economist at HSBC said, “Despite the upside surprise of industrial production growth in December, the ongoing slowdown of investment and exports implies more headwinds to growth and likely destocking pressures for manufacturers in the coming months. We expect more policy easing to stabilize growth."
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