Caixin PMIs confirm China sag

Via Capital Economics:

• The latest survey data, while not as bad as some feared, still paint a fairly downbeat picture. We expect the economy to weaken further in the coming months, triggering additional policy easing.

• After slumping from 50.6 to 50.0 in September, the Caixin manufacturing PMI edged back up to 50.1 in October. This was slightly stronger than anticipated (the Bloomberg median was 50.0, our forecast was 49.8) but still points toward slower growth on the China Activity Proxy, our in-house measure of GDP growth. (See Chart 1.) The sharp fall last month in the official manufacturing PMI is also consistent with weakening momentum. (See yesterday’s Data Response.)

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.