China Manufacturing PMI Dips Below 50 For November1 December, 2011, 16:00. Posted by Zarathustra
China’s official manufacturing purchasing managers index (PMI) dips below 50 for the first time since the recovery. The headline PMI declined to 49, below consensus of 49.8.
Looking into the components probably provides an even gloomier picture. New exports order declined further to 45.6 from 48.6, indicating continued deterioration of global demand. New orders also dropped below 50 to 47.8, while finished goods inventory increased from 50.3 to 53.1. New order minus inventory, as a result, dips decisively into negative territory. The only good news, it appears, is that the input price component dropped further below 50, indicating
The current November reading is the second worst since record began (the worst one was November 2008).
The headline PMI suggests a contraction in the manufacturing sector, first time since the recovery. The only good news, it appears, is that the price component has fallen decisively, which should open some rooms for easing (as we have seen yesterday with a 50bp cut in RRR).