Tuesday, 20 November, 2018

China reports lowest manufacturing growth in over two years

China's Manufacturing Sector Expands Marginally Manufacturing growth slows in October - PMI
Nellie Chapman | 03 November, 2018, 05:58

The U.K. economy is on course to expand by around 1.3% for the 2018 year, a much lesser rate than the 1.7% seen in 2017, due to a steep weather-induced slowdown in the first quarter according to Office for Budget Responsibility (OBR) forecasts released Tuesday.

But it remained above the 50-point mark that separates expansion from contraction for a 27th consecutive month.

"Aside from the demand-side impact of the SST, there were reports of general underlying market weakness hampering new business growth, which restricted the extent to which firms were passing through higher cost burdens to clients", he said.

New export orders, an indicator of future activity, contracted for a fifth straight month and at the fastest pace in at least a year. The softness in total new orders was mainly centred on the consumer goods sector, as the intermediate and investment goods categories both recorded mild growth. This indicates that foreign demand continued to wane, while the pressure on enterprises dealing with exports rose yet again. This means the manufacturing sector is growing more slowly, as Zhao Qinghe, a senior statistician from NBS' Service Survey Center, interpreted the PMI data.

- Economists say sector unlikely to add to GDP growth in Q4.

PMI surveys measure changes in industry activity by asking respondents to rate conditions for employment, production, new orders, prices, deliveries and inventories.

Today's survey showed that while new orders continued to rise in October, the rate of expansion slowed for the second month in a row and now stands at a six-month low.

More than 70 per cent of USA firms operating in southern China are considering delaying further investment there and moving some or all of their manufacturing to other countries as the trade war bites into profits, a business survey showed on Monday. This has slowed the Chinese economy and hurt manufacturers in the industrialised world.

Private sector firms in all sectors account for 60 per cent of Chinese economic activity and 80 per cent of employment.

Purchasing Managers' Index™ (PMI™) surveys are now available for over 40 countries and also for key regions including the eurozone.

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