China November industry output shrinks; PMI falls below 50%

01 December 2011 04:03  [Source: ICIS news]

China November industry output shrinks; PMI falls below 50%SHANGHAI (ICIS)--China’s purchasing managers’ index (PMI) in November declined by 1.4 percentage points to 49.0% from October, indicating a contraction in manufacturing output for the first time in 32 months, official data showed on Thursday.

The PMI reading of the world’s second biggest economy was last seen in a contraction mode, with a reading below 50%, in March 2009.

Data from the China Federation of Logistics and Purchasing (CFLP) showed that the country’s barometer of manufacturing activities had continuously fallen from April to July. The PMI reading rebounded in August and September, before resuming falls in October.

The monthly declines in PMI indicate that the country's economic momentum is slowing down, said Zhang Liqun, an analyst at CFLP.

Under the November PMI, new orders index fell by 2.7 percentage points from October to 47.8%, while production index dropped by 1.4 percentage points to 50.9% in November, according to the official data.

China’s import index in the PMI last month increased 0.3 percentage points to 47.3%, while export index fell 3.0 percentage points to 45.6%, the data showed.

China remains as a leading importer of global products while demand from economies in the West is in doldrums because of the eurozone debt crisis, said an analyst from brokerage Xingye Securities who declined to be named.

Purchasing index in November also declined 1.8 percentage points from October to 44.4%, CFLP data showed.

These numbers also indicated a weakening of domestic demand and business enterprises may be faced with shortage of orders this month to early next year, said Zhang.

The PMI, which is a measurement of the monthly performance of China’s factories, is based on a survey of 820 manufacturers across 20 industries. A figure above 50% indicates an expansion, while a figure below 50% means a contraction.

Please visit the complete ICIS plants and projects database

By: Dolly Wu
+65 6780 4359

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly