The official PMI for November dropped to 50.3, well under the consensus expectation of 50.6. November's reading was a nine-month low, matching the mini-stimulus inspiring reading from March 2014. China's economy is clearly slowing down, and manufacturers seem to be hitting the brakes in the face of waning demand and an overall uncertain outlook. All major sub-indexes were lower MoM. New orders were an 8-month low of 50.9, with anemic exports (48.4, a 9-month low) and exports (47.3, also a 9-month low) dragging the index lower. The employment outlook was still pointing to a contraction, and at 48.2 worsened slightly from October, matching earlier months' levels.
As if the headline number wasn't clear enough, a brief summary of the sub-index data adds color: 11 of the 12 sub-indexes were weaker MoM, and 7 of the 12 were signaling contraction (i.e. beneath 50).
November's data confirms what some corners of the market have been worried about - a quickening slowdown showing no real signs of changing anytime soon. When combined with seasonal weakness in Q4-Q1 period, the near-term prospects look bleak. The government may move to apply more stimulus, but beyond pushing up statistics, seeing any 'real' growth may be slow to follow.
|China Manufacturing PMI Sub-Index Data||Jan-14||Feb-14||Mar-14||Apr-14||May-14||Jun-14||Jul-14||Aug-14||Sep-14||Oct-14||Nov-14|
|Source: China National Bureau of Statistics|
|New Order Index||50.9||50.5||50.6||51.2||52.3||52.8||53.6||52.5||52.2||51.6||50.9|
|New Exports Orders Index||49.3||48.2||50.1||49.1||49.3||50.3||50.8||50.0||50.2||49.9||48.4|
|New Import Orders Index||48.2||46.5||49.1||48.6||49.0||49.2||49.3||48.5||48.0||47.9||47.3|
|Main Raw Materials Index||47.8||47.4||47.8||48.1||48.0||48.0||49.0||48.6||48.8||48.4||47.7|
|Employed Persons Index||48.2||48.0||48.3||48.3||48.2||48.6||48.3||48.2||48.2||48.4||48.2|
|Supplier Delivery Time Index||49.8||49.9||49.8||50.1||50.3||50.5||50.2||50.0||50.1||50.1||50.3|
|Open Orders Index||45.7||45.1||44.8||44.9||46.0||46.2||46.4||45.9||45.6||44.7||43.9|
|Finished Goods Inventory Index||46.5||47.8||48.3||47.3||47.1||47.3||47.6||48.1||47.2||47.9||47.2|
|Purchase Amounts Index||51.0||49.4||50.3||50.6||52.3||52.0||53.0||51.9||51.2||50.7||50.5|
|Main Raw Materials Purchase Price Index||49.2||47.7||44.4||48.3||50.0||50.1||50.5||49.3||47.4||45.1||44.7|
|Production Prices and Business Activities Index||51.3||61.8||62.7||59.6||56.2||54.8||55.3||57.9||56.0||54.1||52.2|