Eco Data - November 2014 PMI Weakens To 50.3

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Includes: CN, CXSE, FCA, FXI, FXP, GXC, MCHI, PGJ, XPP, YANG, YAO, YINN, YXI
by: China Stock Research

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
Large Enterprises 51.4 50.7 51.0 50.8 50.9 51.5 52.6 51.9 52.0 51.9 51.6
Medium Enterprises 49.5 49.4 49.2 50.3 51.4 51.1 50.1 49.9 50.0 49.1 48.4
Small Enterprises 47.1 48.9 49.3 48.8 48.8 48.4 50.1 49.1 48.6 48.5 47.6
Production Index 53.0 52.6 52.7 52.5 52.8 53.0 54.2 53.2 53.6 53.1 52.5
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

Disclosure: None.