China: PMI rebounds in December
January 1, 2012
The Purchasing Managers' Index (PMI) published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFPL) rose from 49.0 points in November to 50.3 points in December, overshooting market expectations that had the PMI at the same level as in the previous month. Thus, the index returned to expansion mode after having fallen below the 50-point threshold in November for the first time in nearly three years. The rebound observed in December was broad-based, as 3 out of the 5 sub-categories that are used to calculate the overall index recorded gains over the previous month. New orders, which account for 30% of total PMI, rose by 2.0 points to 49.8 points, while production output, which accounts for a quarter of the total PMI, grew by 2.5 points to 53.4 points. Moreover, export orders increased 3.0 points to 48.6 points, but still remained below the 50-point threshold for the third consecutive month. That said, despite the improvement, a majority of components remained below the 50-point threshold The December PMI suggests that the economy remains resilient, which in part reflects the supportive policy adopted lately by the government to counter the effects of cooling global demand. Moreover, analysts reckon that the December PMI benefited from seasonal demand ahead of the Chinese New Year holidays, which begins on 23 January.