BEIJING: China’s manufacturing sector showed signs of recovery yesterday as an HSBC survey provided fresh evidence that the worst may be over for the world’s number two economy.
The preliminary purchasing mangers’ index (PMI) released by the British banking giant hit 49.1 this month, the highest level in three months and up from 47.9 in September. A reading above 50 indicates growth and anything below points to shrinkage.
While the figure marks the 12th straight month of contraction, it is also the second consecutive monthly improvement and adds to recent indications the economy is on the mend after a slowdown stretching back to last year.
They also come at an important time politically as the country prepares for a once-a-decade leadership change at a Communist Party meeting that starts on November 8.
The index, compiled by information services provider Markit and released by HSBC, tracks manufacturing activity and is a closely watched barometer of the health of the economy.
China’s official PMI figure was 49.8 for September, a second straight contraction. October’s official figures are expected on November 1, the same day HSBC will release its final result.
HSBC economists Sun Junwei and Qu Hongbin said in a report that October’s reading came as total new orders picked up to a six-month high, while new export orders had their best showing in five months.
They also noted that the PMI result “reflected the filtering through of earlier easing measures” introduced by policymakers this year to boost growth.
Those include two interest rate cuts in quick succession as well as the loosening of restrictions on how much money banks must keep on hand in an effort to boost lending.
China last week said the economy grew 7.4 percent in the three months to September, slowing for the seventh straight three-month period and its worst performance since the first quarter of 2009.
AFP
