China: PMI falls below the 50-point threshold for the first time since 2009
December 1, 2011
The Purchasing Managers' Index (PMI) published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFPL) fell to 49.0 points in November, which was below the 50.4 points in October but undershot market expectations that had the index falling to 49.8 points. The November print broke the 50-point threshold that separates expansion from contraction for the first time since February 2009. The decline observed in November was broad-based, as 9 out of the 11 sub-categories recorded losses over the previous month and, in fact, a majority of components fell below the 50-point threshold. Production output, which accounts for a quarter of the total PMI, slipped by 1.4 points compared with the previous month, but remained at 50.9 points. Moreover, export orders declined sharply from 48.6 points to 45.6 points, which reflected a subdued outlook for global demand. The November PMI suggests that the economy is slowing at a faster pace than previously expected, which may trigger a more supportive stance from the PBOC to shore up the domestic market.