Activity in China’s vast factory sector grew at a milder pace this month on shrinking new export orders, a preliminary private survey showed on Thursday, bolstering expectations that the economy could lose some vigour in the fourth quarter.
The Flash Markit/HSBC purchasing managers index (PMI) fell to 50.4 from last month’s final reading of 50.9, but for a fourth consecutive month remained above the 50 level that demarcates expansion of activities from contraction.
“China’s growth momentum softened a little in November, as the HSBC Flash China Manufacturing PMI moderated due to the weak new export orders and slowing pace of restocking activities,” said Qu Hongbin, chief China economist at HSBC.
“The muted inflationary pressures should enable Beijing to keep policy relatively accommodative to support growth,” he said in a comment accompanying the PMI.
A sub-index measuring new export orders fell to a three-month low of 49.4 from 51.3 last month, reflecting lethargic external demand due to patchy recoveries in developed countries.
Overall new orders also edged down slightly, which could suggest that a revival in domestic demand is not strong enough to offset faltering external orders.
Among the 11 sub-indices in the survey, nine pointed to either slower growth or a contraction, including jobs.
China has set an annual economic growth target of 7.5 per cent for this year, which officials and economists have said is achievable, though the economy is firmly on track to post its slowest growth in 23 years.
Many economists said the economy is likely to show a weaker momentum in the final three months of this year after a rebound between July and September, because of slowing credit growth and a fall-off in restocking demand.
Beijing has made it clear it would accept a slower growth rate while it pushes ahead with economic reforms to wean growth away from investment and export towards consumption.
The final HSBC PMI for this month is due to be published on Dec 2, a day after the release of an official survey.