China's flash PMI slips to three-month low

Monday 16 December 2013 07.34
China's flash Markit/HSBC Purchasing Managers' Index fell to 50.5 from November's final reading of 50.8.
China's flash Markit/HSBC Purchasing Managers' Index fell to 50.5 from November's final reading of 50.8.

Growth in activity in China's vast factory sector slowed to a three-month low in December as reduced output offset a pickup in new orders, a preliminary private survey showed today.

The survey was in line with other recent data pointing to a resilient but slowing economy.

The flash Markit/HSBC Purchasing Managers' Index fell to 50.5 from November's final reading of 50.8.

But for a fifth consecutive month the index remained above the key 50 line which separates expansion of activity from contraction.

Growth in both new orders and export orders grew at a faster rate in the period surveyed, while sub-indexes measuring employment and stocks of purchases showed faster rates of decrease.

Many economists have said China's economy is likely to show weaker momentum in the final three months of this year after a rebound between July and September, due to slowing credit growth and a fall off in restocking demand.

Data earlier in the month showed growth in China's factory output and investment eased slightly in November, though retail sales grew at their strongest rate this year, suggesting the economy is on track to achieve the government's 7.5% growth target this year. 

Beijing has made it clear that it would accept a slower growth rate while it pushes ahead with economic reforms to wean the growth away from investment and export towards consumption.

The leadership pledged to maintain stable economic policies to achieve reasonable economic growth in 2014 while forging ahead with reforms, as they wrapped up a closed-door meeting on Friday.

The annual Central Economic Work Conference did not set a target for 2014 GDP growth, with state media reporting that the government would "maintain appropriate growth in gross domestic product."