China manufacturing index falls to more than 3-year low

Global manufacturing growth remained tepid in November as new orders came in at a slower pace, surveys showed on Tuesday.

“The November reading is exactly in line with the 12-month average and represents the thirty-fifth straight score above the 50 threshold which divides growth from contraction”.

Last month, employment in the manufacturing sector was broadly unchanged while outstanding business held by Indian goods producers rose during the same period, amid evidence of delayed payments from clients and labour shortages.

Meanwhile, Caixin had a 48.6 PMI reading for China in November, slightly up from 48.3 in October, citing a pick-up in new export business and output, the Chinese media group said in a statement released on Tuesday.

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.

That remained above the 50-level that signals expansion; but suggested momentum in the sector is weakening.

Although Australia’s manufacturing sector is now far less influential that what it once was, it is encouraging to see activity levels continuing to improve given the sector was mired in contractionary territory for much of the past two years.

The official index, compiled by the Chinese Federation for Logistics and Purchasing, includes more of the country’s larger, state owned enterprises while the Caixin survey is weighted to smaller, private enterprises in China’s manufacturing industry, which employs tens of millions.

Input prices increased for a second month although firms did not pass on the cost burden fully to consumers.

“The slowdown in growth combined with weak inflationary pressures support further rate cuts”, Pollyanna De Lima, Economist at Markit and author of the report, said. “Data suggested that the main driver behind the fall in total new orders was poor domestic demand, as new exports increased during November”, said the firm.

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.

The government has turned to monetary loosening to stimulate growth, cutting interest rates six times over the past year. Albeit slight, the rate of growth was the strongest in three months.