China’s National Bureau of Statistics’ official Purchasing Managers’ Index (PMI) hit 49.6 in November, its lowest reading since August 2012 and down from the previous month’s reading of 49.8.
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The Markit/CIPS UK Manufacturing Purchasing Managers’ Index dropped to 52.7 in November, down from October’s 16-month high of 55.2 (revised from 55.5).
The US manufacturing sector expanded at its slowest pace in 25 months as output and new orders slowed down, figures released on Tuesday showed.
While an improvement on the steeper rates of decline seen in the four months to September, the latest survey data highlight how Asian manufacturing has failed to register any growth since February and, as such, looks set to continue to act as a drag on global economic growth.
New home prices in 100 major cities in China rose almost three percent year-on-year in November, the fourth straight month of increase, according to a report by the China Index Academy. A reading above 50 signals expanding activity while anything below indicates shrinkage. The employment data are expected to further confirm that the Fed is on track to deliver its first interest-rate hike in almost a decade when it meets later this month.
The PMI data for November was below expectations, but this will not have a big impact on the market, said Liu Dongliang, an analyst at China Merchants Bank. Deflationary pressures are as strong as ever, with the main raw materials purchase price index slipping 3.3 points to 41.1. That said, the rate of growth was the weakest over this period.
Consequently, manufacturing production rose at the softest pace in the current sequence of expansion.
It is understood that the strength of the sterling and new business wins from the United Kingdom helped to contribute to the growth of new exports orders.
“On balance, the tepid PMI prints from China suggest that growth momentum in Q4 is likely to remain weak”, says Barclays in a research note.
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United States crude oil prices steadied after volatile trading overnight in which they first rallied and then erased gains after a survey estimated higher Organisation of the Petroleum Exporting Countries (Opec) output. “Input cost and output charge inflation as measured by the survey were much lower than their respective long-run averages”, added De Lima.
