Growth Concerns Linger as China HSBC PMI Contracts to 49.5

Chinese factory output fell for a second straight month in December, boosting expectations that more stimulus measures will be needed to avoid a sharper slowdown amid slowing activity in the world’s second-largest economy.

The flash HSBC/Markit China manufacturing purchasing managers’ index (PMI) slipped to 49.5 from a final reading of 50 in November, contracting for the first time in seven months. The 50-point level separates growth from contraction.

“This means that China is leaving this year on a very weak note,” Frederic Neumann, MD & co-head of Asian economics at HSBC, told CNBC. “We see a contraction in the manufacturing sector. Even new orders – a forward-looking indicator – points to further weakness ahead. I think they need to ease more just to right the ship again.”


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