China manufacturing stalls

Activity in China’s manufacturing sector stalled in November
and fell to a six-month low, according to a key index.

The flash HSBC/Markit manufacturing purchasing managers’ index (PMI) for November was 50.0. The reading was below the forecast of 50.3
and represented a drop from the October figure of 50.4.

Readings above 50 indicate expansion in the sector, while
readings under 50 indicate contraction. So there was no change compared to last
month.

Commenting on the result, Hongbin Qu, chief China economist
at HSBC said in a statement –

“New export order growth continued to ease and led to a
below-50 reading for the output sub-index for the first time since May.

“Disinflationary pressures remain strong and the labour
market showed further signs of weakening. Weak price pressures and low capacity
utilization point to insufficient demand in the economy.

“Furthermore, we still see uncertainties in the months ahead
from the property market and on the export front. We think growth still faces
significant downward pressures, and more monetary and fiscal easing measures
should be deployed.”

As the Australian reports, the result is further indication
that China’s economy is slowing. The nation’s third quarter growth of 7.3 per
cent was the lowest for five years and, according to an official report, its
property market fell by 2.6 per cent in October.

The flash estimate is typically based on approximately
85%–90% of total PMI urvey responses each month and is designed to provide an accurate
indication of the final PMI data. November final PMI data will be released on 1
December 2014.