Operating conditions worsen in manufacturing: PMI

China’s official manufacturing PMI slowed more than expected in November, missing forecasts.

The weak Singapore figure is in line with soft regional PMI readings, with factory activity in China, Taiwan, South Korea, Malaysia and Indonesia in contractionary mode last month.

Manufacturing production expanded for the thirty-second successive month in November.

Some analysts expect China’s economy will bottom out in the fourth quarter as a burst of stimulus measures rolled out by Beijing gradually takes effect, but many remain wary about the outlook.

Significantly, the latest manufacturing data also suggests that domestic demand, which the government hopes will rise to offset China’s export slowdown, may also be declining.

The seasonally adjusted Markit/CIPS Purchasing Manager’s Index (PMI) posted 52.7 in November, down from October’s 16-month high of 55.2 (originally reported as 55.5).

The sub-index for new orders in services climbed over 50 to 50.3, up 1.4 percentage points from October, showing a demand rally in the service market, said Zhao. “Overall, the economy is still on track to become more stable”, said He Fan, chief economist at Caixin Insight Group.

Both input costs and output prices fell further in November, fueling concerns about deflationary pressure.

The Brazil HSBC/Markit PMI index which fell to 43.8 in November from 44.1 in October.

The report said construction spending climbed 1.0 percent to an annual rate of $1.107 trillion in October from the revised September estimate of $1.097 trillion.

Spot gold XAU= was up about 0.3 percent at $1,067.81 an ounce, though it remained close to a almost six-year low of $1,052.46 plumbed last week, pressured by the recently robust dollar and growing expectations of higher US interest rates.

Markit’s surveys have painted a brighter picture of British manufacturing than official data, which has shown the sector stagnant or contracting since the start of the year. New export orders rose at consumer and intermediate goods firms, while a contraction was seen in the capital goods category. While ongoing expansion in the sector signalled by today’s figure is to be welcomed, the positive trend isn’t broad based across industry and isn’t supporting sufficient confidence to prompt a return of employment growth.

Indonesia’s manufacturing activity slipped to a seven-month low of 46.9 due to further deterioration in operating conditions as demand declined at the sharpest rate in the history of the series and job cuts continued.