China’s preliminary PMI, the flash PMI from Markit Economics and HSBC, is showing improvement from last month. The preliminary reading came in at 49, an improvement from last month’s 47.7 level. While it’s certainly welcome news to see the PMI come in better than expected it is still showing a contraction. HSBC elaborates on the report:
The HSBC Flash China Manufacturing Purchasing Managers’ Index™ (PMI™) is published on a monthly basis approximately one week before final PMI data are released, making the HSBC PMI the earliest available indicator of manufacturing sector operating conditions in China. The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data.
Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & CoHead of Asian Economic Research at HSBC said: “The pace of slowdown stabilized in December but the growth momentum remains weak with additional downside risks from exports and the property market not yet fully filtering through. With inflation quickly shifting to disinflation, the Chinese government can and should make more aggressive easing on both fiscal and monetary fronts to stabilize growth and jobs.”
Source: HSBC & Markit Economics