New | China’s HSBC flash PMI sinks to three-month low, but rebound signals stay
December's 50.5 rate still above average from previous quarter, buoyed by manufacturing and retail
Growth in activity in China’s vast factory sector slowed to a three-month low in December as reduced output offset a pickup in new orders, a preliminary private survey showed on Monday, in line with other recent data pointing to a resilient but slowing economy.
The flash Markit/HSBC Purchasing Managers’ Index (PMI) fell to 50.5 from November’s final reading of 50.8, but for a fifth consecutive month remained above the 50 line which separates expansion of activity from contraction.
Given the approaching year-end holiday season, the flash PMI covers only the short period from December 5 to 12. The final PMI will be released on January 2.
Growth in both new orders and export orders grew at a faster rate in the period surveyed, while sub-indexes measuring employment and stocks of purchases showed faster rates of decrease.
“The December HSBC Flash China Manufacturing PMI reading slowed marginally from November’s final reading,” said Hongbin Qu, chief economist for China at HSBC, in a comment accompanying the PMI.
“But it still stands above the average reading for [the third quarter], implying that the recovering trend of the manufacturing sector starting from July still holds up. As a result, we expect China’s GDP growth to stabilise at around 7.8 per cent year on year in [the fourth quarter].”