Official Survey: China Factory Activity Rises to 2-Year High

The Institute for Supply Management’s index increased to 53.2 from 51.9 a month earlier, the Tempe, Arizona-based group’s report showed Thursday.

It said most notable was the 6.9-point rise in the new sales orders index to 51.4 points.

“Faced with a greater number of incoming new projects, Russia’s manufacturing sector recorded a further accumulation of outstanding business in November”, according to the report.

The sector had continued to bounce back from a slump following the European Union referendum, with business activity and incoming new work growing at their strongest pace since March.

A reading above the 50.0 mark indicates growth, and October was the first time in four months the sector had reported signs of expansion.

Tim Moore, a senior economist at IHS Markit, said the sector had continued to recover from a slow third quarter. “This suggests that the manufacturing sector should experience a bit of a bounceback in Q4”, said Scott Bowman of Capital Economics.

“Scratching beneath the surface of the data shows that rising consumer demand and business-to-business spending is helping manufacturing to grow at a robust clip”.

A sub-index for smaller firms fell, while performance for larger companies improved, a sign that the government’s dependence on big state firms for growth this year has not changed.

He added: “The exchange rate is also having a major impact at manufacturers”. This is encouraging for a sector that has seen subpar growth over much of the past two years on global headwinds and economic anxieties.

Manufacturers hired staff at a slightly slower pace than in October, the PMI showed.

But cooling price pressures, as reflected in the latest PMI where both input and output price rises decelerated, may act as a temporary relief and provide room for the Reserve Bank of India to cut interest rates further. Construction firms appeared to be undeterred by the potential economic uncertainty, increasing their pace of hiring for the fourth month in a row.

A manufacturing survey from the Confederation of British Industry posted in the previous week displayed the biggest increase in price pressures for nearly three years, although new orders jumped at the fastest rate since before the Brexit vote.