FACTORY activity in China unexpectedly returned to growth in November for the first time in seven months, as domestic demand picked up on the government’s accelerated stimulus measures to steady growth. The Purchasing Managers’ Index (PMI) bounced back to 50.2 in November, its highest since March, China’s National Bureau of Statistics (NBS) said Saturday, above the 50-point mark that separates growth from contraction on a monthly basis. The result compared with 49.3 in October. A recent poll showed analysts expected the November PMI to come in at 49.5, rising just marginally from the previous month. The official factory gauge pointed to an improvement in China’s vast manufacturing sector last month. Total new orders bounced back to expansionary territory with the sub-index rising to 51.3, the highest level seen since April. That indicates domestic consumption firmed up after China repeatedly urged local governments to kick stimulus up a gear to meet economic goals before year-end. China has front-loaded 1 trillion yuan (US$142 billion) of a 2020 local government special bonds quota to this year and has urged that they be issued and used as early as possible, a sign that some analysts believe suggests the government is worried about downward pressure on the economy. Factory output also rose to 52.6 in November, the strongest pace since March. New export orders fell for an 18th straight month in November, albeit at a slower pace, with the sub-index rising to 48.8 from 47 in October. The PMI survey also indicated factories continued to cut jobs in November despite slightly improved business confidence. The employment sub-index was at 47.3, unchanged from that in October. China’s drive to guide more bank lending towards small private firms appeared to be working. Their PMI index recorded the strongest gain in November, compared to medium-sized and large firms, but their performance was still the poorest of the three at 49.4. Growth in China’s services sector activity also quickened in November. The official services PMI picked up to 54.4, recovering from October’s 52.8, the lowest point since February 2016, a separate NBS survey showed. (SD-Agencies) |