China Manufacturing Slowed in November

Rob Dobson, senior economist at Markit, said: “UK manufacturing is moving back into expansion mode during quarter four, as it starts to reverse the losses sustained in the prior quarter”.

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.

Services, which have helped offset the weakness in manufacturing, showed some improvement. A federal funds rate below 1% could be appropriate at the end of 2016, he added.

Another survey showed manufacturing activity in China slowed to a three-year low.

The November PMI from the Markit’s Nikkei Malaysia Manufacturing Purchasing Managers’ Index was 47.0, down from 48.1 in October.

A reading above 50 indicates expansion. The sub-index for the construction industry increased 1 percentage point from October to 58.1.

As a result of reductions in production and new orders, buying activity declined and recorded its sharpest rate of decrease since the survey began in July 2012.

The figure of 49.6 marked a further fall from October’s 49.8, and the fourth month the PMI index had been in negative territory, state media reported. It was the highest reading since April 2014. The jobless rate dipped to 6.3% in November from 6.4% in October.

“What is interesting about the new weightings is that the biggest change is for the euro, which now accounts for 30.9% of the basket instead of 37.4%”. After many months of speculation, a rate increase might remove some of the uncertainty that has caused large swings in emerging-market currencies and stock markets.

The buck has rebounded from an early low of USD1.5125 against the pound sterling, to around USD1.5080 this afternoon.

Pollyanna De Lima, economist at Markit Economics, which is the compiler of the PMI survey, said, “The slowdown in growth combined with weak inflationary pressures support further rate cuts”.

Its PMI survey was 48.6 for November, a slight rise from the previous month, fuelled mostly by stabilising output, the two firms said.

Separate reports released by the Australian Bureau of Statistics showed that building approvals in Australia unexpectedly rose in October compared to the previous month, while the nation’s current account deficit narrowed by less than expected in the third quarter.

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