India manufacturing activity falls to 25-month low

Activity in China’s manufacturing sector fell to a 39-month low in November, official data showed on Tuesday, mainly due to weak demand, both domestically and internationally.

The official Purchasing Managers’ Index (PMI), which tracks activity in factories and workshops, fell to 49.6, figures from the National Bureau of Statistics showed.

The official figure also missed an economist poll by Reuters that expected a reading of 49.8. A reading above 50 marks expansion of the sector, while a score below this level means contraction. “The health of India’s manufacturing economy improved for the 25th successive month in November, although to the least extent in this sequence”.

New sales orders recorded the sharpest decline of the major subcomponents‚ slumping to 43.5 last month from 50.5 in October while business activity dropped further to 41.4 from 47.7 in October.

Analysts and Chinese politicians say the country needs to rebalance away from reliance on exports and fixed asset investment towards a consumer-driven economy. And it said factories’ output had stabilized for the first time in six months.

CHINA CURRENCY: The IMF’s move to include the yuan along with the dollar, pound, euro and yen in its yardstick basket reflects the rising importance of China’s economy and its currency. “We’re bound to end the year on as soft a note as we started it. And things are not looking much more promising for 2016 either”.

The higher PMI “indicates that pressure on economic growth has eased and fiscal policy has had a strong effect”, said Dr. He Fan, chief economist of Caixin Insight Group. The index fell for the fourth consecutive month in November.

Spot gold was up about 0.3% at $1,067.81/oz, although it remained close to a almost six-year low of $1,052.46 plumbed last week, pressured by the recently robust dollar and the growing expectation of higher United States interest rates.

While it remained comfortably above the 50 line denoting growth, the index registered the slowest pace of expansion since February 2014.

“The slowdown in growth combined with weak inflationary pressures support further rate cuts”, De Lima added.

However, leading private manufacturing survey Caixin PMI showed a glimmer of improvement. It may be a bit premature to call an upward trend in the coming months.

Looking ahead, economists surveyed by CNNMoney are expecting 6.8% GDP growth for the year – below the government’s own 7% target.