Photo: Bank of America-Merrill Lynch
China’s official manufacturing PMI report climbed to 50.6 from 50.2 a month ago. However, the number was shy of the 50.8 forecast by economists.So was this a disappointing report?
Not when you look at the sub indicies.
“It’s especially encouraging that the rise of PMI was mainly driven by new orders (to 51.2 in Nov from 50.4 in Oct), suggesting output will be further boosted in coming months,” writes Bank of America’s Ting Lu.
What about employment, one of two components of the report that fell (the other nine components rose)?
“Employment declined to 48.7 in Nov from 49.2 in Oct.” writes Lu. “Note the adjustment in labour market usually lags behind economic conditions as firms are reluctant to cut payrolls in the early stage of a slowdown, and also slow to increase hiring in a recovery. We expect that the current labour market could ensure that Beijing keeps policy easing/stimulus to support growth.”
Overall, the report confirms the idea that economic growth bottom in Q3 and is currently accelerating argues Lu.