Sunday 16 September 2012

DISAPPOINTING DATA IN CHINA

Gulf Times

DISAPPOINTING DATA DENTS CHINA ECONOMY OPTIMISM

Gulf Times, September 16, 2012

The summer has seen a string of disappointing economic data that has dented optimism about a pickup in China during the second half of the year, according to analysis by QNB Group.

China’s growth rate has been steadily slowing since the start of 2010, but many economists had hoped that the trend would be reversed. However, leading indicators such as weak trade data, disappointing purchasing manager indices (PMIs) and slow industrial production suggest that the deceleration is continuing into the third quarter of the year, despite some efforts at stimulus. However, much of the slowdown is related to external factors and the domestic market remains relatively buoyant, and there is an ongoing boom in the west of the country.

The latest disappointments were the values of PMIs in August. These indices are based on surveys of companies inquiring about trends in factors such as their orders, production and employment levels. Significantly, the official manufacturing PMI fell to 49.2. This was only the second time since February 2009 that it has measured below the 50 point mark, which divides expansion from contraction.

An alternative manufacturing PMI, published by HSBC, has been in negative territory for almost a year, and fell further to 47.6 in August. Worryingly, the PMI component relating to new orders was particularly low and the component relating to inventory reached a record level since the index was launched in 2004. This suggests that the sector is producing well above demand levels and that output is likely to fall further as it will not make sense to continue building inventory.

(...) [artículo aquí]

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