China PMI Slips

December 31st, 2014 9:11 pm | by John Jansen |

Via Bloomberg:

China Factory Gauge Slips to Lowest Level Since June 2013


A Chinese manufacturing gauge slipped to the lowest level in 18 months, adding pressure on policy makers to do more to support growth.

The government’s Purchasing Managers’ Index (CPMINDX) fell to 50.1 in December, compared with November’s 50.3 and a median estimate of 50 in a Bloomberg News survey of analysts. Numbers above 50 indicate expansion.

Investors’ expectations for more monetary easing have sent stocks soaring, with the Shanghai Composite Index registering its biggest annual gain since 2009. Weakness in the housing market is weighing on an economy that probably expanded last year at the slowest pace since 1990, according to economists surveyed by Bloomberg News.

China’s deepening real-estate correction is the primary cause of the current slowdown,” Bill Adams, senior international economist for PNC Financial Services Group in Pittsburgh, wrote in a note before today’s data release. “The drag from the real-estate sector will be partially offset by modestly better demand for Chinese exports in 2015.”

A manufacturing gauge released yesterday by HSBC Holdings Plc and Markit Economics fell to a seven-month low.

The Chinese economy grew 7.4 percent last year and the pace will cool to 7 percent this year, according to Bloomberg’s survey. Shanghai’s benchmark stock index rose 53 percent last year, with most of the gain coming in the fourth quarter, when the central bank cut interest rates.

The government’s manufacturing index, released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing in Beijing was based on responses to surveys sent to purchasing executives at 3,000 companies.

A services PMI rose to 54.1., compared with the previous month’s 53.9, according to a separate report today from the NBS and the CFLP.

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