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China manufacturing activity beats expectations in October
01 Nov, 2019 09:1
Activity in China's manufacturing sector expanded at its fastest pace in nearly three years in October, according to a private survey released on Friday.
The Caixin/Markit purchasing managers' index for the sector printed at 51.7 this month compared to 51.4 in September, beating expectations for a reading of 51.0. This marked the highest level since February 2017 and the third month in a row that it has been above the 50.0 mark that separates expansion from contraction.
Caixin/Market said output and new orders both expanded at steeper rates, with the latter supported by a renewed increase in export business. As a result, companies increased their purchasing activity at the quickest pace for 20 months.
"However, efforts to contain costs contributed to a further drop in staffing levels, which underpinned another solid increase in outstanding business. Prices charged by manufacturers fell slightly due to competitive market pressures, while cost burdens rose a touch."
The survey found that business confidence regarding the 12-month outlook for output improved to its highest since April, with a number of firms optimistic that market conditions will improve.
Dr. Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, said: "China’s manufacturing economy continued to recover at a relatively quick pace in October. New orders placed with companies improved substantially, and new export orders rose at the fastest pace since the Sino-US trade war broke out.
"However, business confidence has been weak. Deliveries of inputs were further delayed. Inventory activities were subdued. The employment sector continued to contract. If the improvement in demand, including that generated by infrastructure projects and exports, is able to continue, the manufacturing sector can gradually build a foundation for stability."
Pantheon Macroeconomics said: "The trade truce seems to have boosted confidence, where the official gauge remained oblivious. That could reflect the greater representation of smaller export-oriented firms that have been harder hit but the trade war. New export business snuck above 50 for the first time in five months.
"The employment sub-index indicated a faster decline in headcount, but this led to another sturdy increase in outstanding business. Employment is a lagging indicator and this survey, at least suggests that labour demand should be rebuilding.
"The price sub-indices concur with the official gauge, pointing to another steepening of PPI deflation.
"Overall, the sustained uptrend is consistent with a few other indicators of private sector activity and will cheer the authorities, but we still think the index looks exposed in the context of still tight monetary conditions."
https://www.sharecast.com/news/inte...y-beats-expectations-in-october--7102348.html
01 Nov, 2019 09:1
Activity in China's manufacturing sector expanded at its fastest pace in nearly three years in October, according to a private survey released on Friday.
The Caixin/Markit purchasing managers' index for the sector printed at 51.7 this month compared to 51.4 in September, beating expectations for a reading of 51.0. This marked the highest level since February 2017 and the third month in a row that it has been above the 50.0 mark that separates expansion from contraction.
Caixin/Market said output and new orders both expanded at steeper rates, with the latter supported by a renewed increase in export business. As a result, companies increased their purchasing activity at the quickest pace for 20 months.
"However, efforts to contain costs contributed to a further drop in staffing levels, which underpinned another solid increase in outstanding business. Prices charged by manufacturers fell slightly due to competitive market pressures, while cost burdens rose a touch."
The survey found that business confidence regarding the 12-month outlook for output improved to its highest since April, with a number of firms optimistic that market conditions will improve.
Dr. Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, said: "China’s manufacturing economy continued to recover at a relatively quick pace in October. New orders placed with companies improved substantially, and new export orders rose at the fastest pace since the Sino-US trade war broke out.
"However, business confidence has been weak. Deliveries of inputs were further delayed. Inventory activities were subdued. The employment sector continued to contract. If the improvement in demand, including that generated by infrastructure projects and exports, is able to continue, the manufacturing sector can gradually build a foundation for stability."
Pantheon Macroeconomics said: "The trade truce seems to have boosted confidence, where the official gauge remained oblivious. That could reflect the greater representation of smaller export-oriented firms that have been harder hit but the trade war. New export business snuck above 50 for the first time in five months.
"The employment sub-index indicated a faster decline in headcount, but this led to another sturdy increase in outstanding business. Employment is a lagging indicator and this survey, at least suggests that labour demand should be rebuilding.
"The price sub-indices concur with the official gauge, pointing to another steepening of PPI deflation.
"Overall, the sustained uptrend is consistent with a few other indicators of private sector activity and will cheer the authorities, but we still think the index looks exposed in the context of still tight monetary conditions."
https://www.sharecast.com/news/inte...y-beats-expectations-in-october--7102348.html
