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China manufacturing PMI improves in November

By Michele Maatouk

Date: Monday 02 Dec 2019

LONDON (ShareCast) - (Sharecast News) - The Chinese manufacturing sector expanded at its fastest pace in three years last month, according to a private survey released earlier.
The Caixin Markit manufacturing purchasing managers' index rose to 51.8 in November from 51.7 in October, marking its fastest expansion since December 2016 and beating expectations for a reading of 51.4.

Meanwhile, the official manufacturing PMI released at the weekend showed a return to growth for the first time in seven months. The PMI ticked up to 50.2 in November from 49.3 the month before, coming in above the 50.0 level that separates contraction from expansion. This followed six consecutive months below 50.0 and was ahead of expectations for a reading of 49.5.

ING economist Iris Pang said: "We expected some improvement in domestic new orders, but the data has surprised us by coming earlier than our expectations. One of the major pushes of new orders is that infrastructure investment has moved from the investment stage to the production stage. This will continue to give support to new orders in the coming year.

"This view is also supported by the rise in prices of steel and cement, which are used in infrastructure projects."

Julian Evans-Pritchard, senior China economist at Capital Economics, said: "Although we remain sceptical that activity is nearly as strong as the Caixin PMI implies, the synchronised improvement in the survey data does point toward some uptick in growth last month.

"That said, with credit growth slowing and property construction still expanding at an unsustainable rate, we doubt this signals the bottom of the current economic cycle."