The HSBC PMI (Purchasing Managers’ Index) for China dropped to 49.5 in December compared to 50.0 in November, a seven-month low, renewing concerns about economic growth.
The China Manufacturing Output Index rose slightly to at 49.7 in December from 49.6 in November.
Hongbin Qu, Chief Economist, China, at HSBC, said domestic demand slowed considerably and fell below 50 for the first time since April 2014.
“The manufacturing slowdown continues in December and points to a weak ending for 2014,” he says. “The rising disinflationary pressures, which fundamentally reflect weak demand, warrant further monetary easing in the coming months.”
The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) is published monthly basis ahead of final PMI data, making this index the earliest available indicator of manufacturing sector conditions in China.