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China factory conditions weaken for 10th month
Activity in the sector has risen six months in a row, its longest period of expansion in five years. The final manufacturing Purchasing Managers’ Index rose to 53.2 in December from 52.8 in November.
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That compared with a median estimate of 49.8 in a Bloomberg survey of economists.
Euro Area Markit manufacturing PMI for the month of December final estimate is expected by market consensus to come in at 53.1, similar to the flash estimates.
Any result above 50 indicates growth. Excess heavy manufacturing capacity, including steel and shipbuilding, will likely “keep Chinese manufacturing sector growth momentum constrained in 2016”. Analysts said that emerging signs of industrial slowdown could put pressure on the RBI to cut interest rates to support economic growth.
China’s factory activity shrank further in December, a private survey showed Monday, the 10th consecutive month of contraction with the world’s second-largest economy set to post its weakest growth in a quarter of a century.
Latest PMI data pointed to a further marked improvement in manufacturing operating conditions in Japan. A PMI figure above 50 signals expanding activity while anything below indicates shrinkage.
The PMI consists of indicators measuring new orders, output, employment, suppliers’ delivery times and stocks of purchases.
The survey showed that new business opportunities mean that employers intend to higher more staff. The gauge of prices was at 35.5 in November, down from 39.0 in October, which suggested lower prices of raw materials for a 13th month in a row. “Monetary policy will remain accommodative and fiscal policy will be more proactive, ” Bloomberg reported.
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The NBS survey is more widespread than than the Caixin-Markit report, collating responses from large, medium and small firms from both the private and public sectors. Forecasters see 6.5 percent growth this year and 6.3 percent in 2017. Glencore declined 6.4% and Antofagasta dropped about 4%.