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China’s NBS just published its official manufacturing PMI report, and it’s a bit of a disappointment.The headline number unexpectedly slipped to 50.4 in January.
Economists were expecting an increase to 51.0 from 50.6 in December.
The good news: any reading above 50 signals expansion.
Jan. 2013 Dec. 2012 PMI 50.4 50.6 Output 51.3 52.0 New Orders 51.6 51.2 New Export Orders 48.5 50.0 Backlogs of Work 44.4 45.9 Inventories of Finished Goods 47.4 49.4 Purchases Quantity 53.2 52.1 Imports 49.1 49.0 Input Prices 57.2 53.3 Inventories of Raw Materials 50.1 47.3 Employment 47.8 49.0 Supplier Delivery Times 50.0 48.8 Earlier this month, the January HSBC Flash PMI jumped to 51.9, a two-year high. HSBC’s PMI reading is more tilted toward small and medium sized enterprises, which are a bit more cyclical than the large companies.
The PMI reports are big deals because for months people have questioning whether China would face a hard or soft landing. With the economy showing signs of re-acceleration again, people are looking for confirmation that the world’s second largest economy is really picking up.
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