Yes, I’m still technically having a break from MB but there is an avalanche of global manufacturing PMI data coming out over the next 24 hours which is hard to resist as it should provide a good overview of what to expect from the world in Q1 2013.
While the world is focused the US over their partial ‘fiscal cliff’ resolution China is also providing some good news at the beginning of 2013. The HSBC China manufacturing PMI came out on New Year’s eve and displayed renewed growth in the manufacturing sector.
After adjusting for seasonal factors, the HSBC Purchasing Managers’ Index (PMI) – a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy – posted 51.5 in December, up from 50.5 in November, signalling a modest improvement of operating conditions in the Chinese manufacturing sector. Moreover, it was the highest index reading since May 2011.
Output at manufacturing plants in China expanded in December, and for the second month in a row. Although the rate of expansion was modest, it was the fastest in 21 months. Total new orders also increased but at a faster pace than in November, the quickest since January 2011. Exactly 15% of panellists noted increased order volumes, a number of which attributed growth to increased client demand. Meanwhile, new export orders fell slightly following a modest increase in November. Just over 12% of firms reported lower new export orders in the latest survey period. Fewer export sales were linked to weak demand in Europe, Japan and the US.
- Output expands at the quickest rate since March 2011
- Total new orders rise despite slight fall in new export orders
- Purchasing activity increases at the fastest pace in 21 months
The “other report” from China appears to show the same trend, although a little less strongly.
An important gauge of China’s giant manufacturing sector published Tuesday showed a third successive month of expansion in December and underlined the view that the world’s second-largest economy has settled into a mild rebound that is likely to extend into 2013.
A survey of purchasing managers in the manufacturing sector, released by the national statistics bureau on the first day of the new year, produced a reading of 50.6 points for December. Figures above 50 mean the sector is growing, while those below suggest contraction.
ANZ came out with a note yesterday which provided a round-up of the data with a cautiously optimistic tone. Of note is the continuation of new orders being driven by domestic demand over exports, the concern about demand out of Europe and the uptrend in input prices. Overall, however, it’s a fair start to 2013 considering where we could have been given the risks of the previous year.
ANZ Quick Reaction – China’s December PMI