China's PMI rebounds beyond market expectations

PMI reveals balanced growth in demand and supply, and momentum shifts rapidly to new industries.

China’s manufacturing and services activity rebounded in November beyond market expectations, indicating a steady economic outlook in the fourth quarter.

The official Purchasing Managers’ Index, which measures vitality in the manufacturing sector, rose to 51.8 in November from October’s 51.6, the National Bureau of Statistics said today.

That was higher than market expectations for 51.4 and remained in expansionary territory for a 16th consecutive month.

November's PMI was 0.2 points higher than the average so far this year.

Zhao Qinghe, the bureau’s senior statistician, said the PMI revealed a balanced growth in demand and supply, and that momentum has rapidly shifted to new industries.

The sub-index for production rose to 54.3 from October’s 53.4, and new orders recovered to 53.6 from 52.9.

The high-tech and consumer goods sectors continued to expand faster than the average, while the oil processing, coking, and metal industries contracted from the same month last year, the data showed.

Zhao said the traditional industries showed a weaker momentum and so reform in these industries have to be strengthened.

Nomura said in a note that the rebound was driven by small- and medium-sized enterprises, and expected China's GDP to rise 6.6 percent in the fourth quarter, slightly slower than 6.8 percent in the third quarter.

“The moderate rebound of the official PMI suggests growth momentum was stable in November,” the note said. “As the PMI captures sequential changes in manufacturing sentiment, we believe the slight improvement in November was mainly due to the weak performance in October.”

The bureau also released data today showing the non-manufacturing PMI rose to 54.8 in November from October’s 54.3, and was 0.3 points higher than the average so far this year.

Increased consumer demand and the Singles' Day promotions also lifted growth in retail, information technology, logistics and warehousing sectors, Zhao added.

Bank of Communications said PMIs in both manufacturing and services industries exceeded market expectations.

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