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China Manufacturing Grows in October

China’s manufacturing activity saw an increase in October, official data showed Thursday.

The purchasing managers’ index (PMI) rose to 50.2 percent in October from 49.8 percent in September, just above the 50-percent figure that demarcates expansion from contraction, according to data released by the China Federation of Logistics and Purchasing (CFLP).

Swinging above the boom-bust line, the October index indicated that the economy’s downward movement may be reversing, according to experts.

“The regain shows the economy is improving, and I believe there will be a modest rise in the fourth quarter,” said Cai Jin, CFLP vice chairman.

Readings for sub-indices have also indicated expansion. The sub-index for new orders climbed 0.6 percentage points from September to 50.4 percent last month. The output sub-index for October stood at 52.1 percent, up 0.8 percentage points from the previous month.

The sub-index for new export orders rose 0.5 percentage points from September to 49.3 percent, while the import sub-index climbed 0.7 percentage points to 48.4 percent.

“Improvements in the overall factory activity and some PMI sub-indices means companies have generally finished destocking, which will lay a good foundation for fourth-quarter growth,” said Zhang Liqun, an analyst with the Development Research Center of the State Council, a government think tank.

The PMI rebounded to 49.8 percent in September, ending four straight months of decline. The index fell below the boom-bust line in August for the first time since November 2011.

Also on Thursday, the final reading of a privately-compiled survey by HSBC was released. It put the October PMI for Chinese manufacturers at an eight-month-high of 49.5 percent, up from 47.9 percent in September.

via Xinhua [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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