The official Purchasing Managers’ Index (PMI) was 49.6 in November, compared with the previous month’s reading of 49.8 and with forecasts by analysts polled by Reuters, who had predicted a reading of 49.8.
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After falling for six months, the output sub- index returned to a neutral reading of 50 in November.
The subdued domestic demand and competitive pressure appeared to slow new orders, whose sub-index fell to a 25-month low of 50.5, from 51.2 in October.
Manufacturing PMI measures the level of output of a country’s manufacturing sector, based on a number of factors including: production, new orders and employment.
Significantly, the latest manufacturing data also suggests that domestic demand, which the government hopes will rise to offset China’s export slowdown, may also be declining.
“On the price front, both input and output prices rose at marked rates, as reports of higher raw material costs led to an increase in cost burdens”, said global diversified provider of financial information services Markit in a statement today.
More positively new orders increased for the twenty ninth successive month while new export business also continued to grow.
However, rate of growth was the weakest over this period. New export orders increased at consumer and intermediate goods firms, while a contraction was seen in the capital goods category.
Activity in China’s manufacturing sector has contracted for a fourth straight month to a three-year low, adding to signs of persistent economic sluggishness despite a flurry of stimulus moves. Inventory levels decreased during November.
Canada was in a modest recession in the first half of the year as the drop in oil prices weighed on business investment.
“Market forces continued to be strong, although at a softer and less robust pace than last month, as purchasing activity continued along its upward trend”, commented David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply. Companies reported higher prices paid for metals, textiles and food.
Factory gate charges were, subsequently raised.
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The Reserve Bank hiked the repo rate to 6.25 percent from 6 percent two weeks ago on the basis that failure to act could raise inflation risks in future. “Considering further cuts in overcapacity, the divergence will continue into at least mid-2016”.
