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QINGDAO TODAY
在线翻译:
szdaily -> Business -> 
Factory activity up but demand ebbs: Caixin PMI
    2018-12-04  08:53    Shenzhen Daily

FACTORY activity grew slightly in November in China, a private survey showed, though new export orders extended their decline in a further blow to the sector.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for November, released yesterday, ticked up to 50.2 from 50.1 in October. Economists polled previously had forecast a reading of 50.0, the level that separates expansion from contraction.

Domestic orders have been losing momentum in recent quarters as the world’s second-largest economy slows. Overall, a sub-index measuring new orders did improve slightly to 50.9 in November from 50.4 in the previous month, after manufacturers cut prices.

The trade risk was underscored by the sub-index for new export orders shrinking to 47.7 in November from 48.8 a month earlier, amid relatively weak global demand conditions, according to the survey.

Over the weekend, on the sidelines of the G20 summit in Argentina, China and the United States reached an agreement that keeps the trade war from escalating for now.

“Sentiment among exporters may improve during the next couple of months thanks to the tariff ceasefire agreed to by Trump and Xi over the weekend,” Julian Evans-Pritchard, senior China economist at Capital Economics, wrote in a note.

“While this may help to buoy the PMIs temporarily, we doubt it will prevent China’s economy from slowing in the coming quarters.”

A more immediate worry for Chinese manufacturers is weak domestic demand.

The Caixin survey showed ebbing client orders weighing on China’s factory output, which stalled in November after months of expansion, the survey showed.

To counter weaker domestic demand, manufacturers cut prices for the first time in more than a year and a half. But that was not enough to prevent a rise in inventories, the first increase since April.

The output prices sub-index fell below the 50-mark to 49.8 in November, boding ill for profit margins. Profit growth at China’s industrial firms slowed for a sixth month in October, according to the latest official data.

The gauge on overall production fell to 50.0 from 50.1 in the previous month.

The downbeat readings backed Friday’s official PMI survey for November showing growth in the nation’s vast factory sector sliding to over a two-year low.

With client demand muted, an effort to contain operating costs led Chinese manufacturers to further reduce staff, while confidence toward the year ahead stayed subdued, according to the survey.

The employment sub-index slipped to 48.4 in November from 48.8 in October.

One bright spot is that average input costs grew at their slowest pace in seven months.

(SD-Agencies)

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