China’s manufacturing activity expanded for the second straight month, according to a private survey, a further sign of stabilization after Beijing rolled out a stimulus package to shore up the economy.
The Caixin manufacturing purchasing managers’ index rose to 51.5 last month, its highest since June, according to a statement issued by Caixin and S&P Global on Monday. The increase was much larger than economists’ forecast of 50.6 and accelerated from 50.3 in October.
The findings suggest that China’s exports continue to fuel the uneven recovery of the $18 trillion economy, despite US President-elect Donald Trump’s threats to impose potentially damaging tariffs. could reduce trade between the two countries. Official measures Activity in November showed a slight recovery in the manufacturing sector, while the construction and services index unexpectedly fell back to the 50 level, the boundary between contraction and expansion.
“Advance payments could continue to support manufacturing activities for several months until the tariffs materialize, which could can happen quite quickly thanks to the mechanism applied in the US.”
Customer stockpiling helped new orders in November grow at the fastest pace since February last year, with output price inflation at a 13-month high, according to a Caixin poll. . However, employment remained down for the third straight month, suggesting the impact of the stimulus has yet to trickle down to the labor market.
“Although the economic downturn appears to have bottomed out, it needs to consolidate further,” Wang Zhe, senior economist at Caixin Insight Group, said in a statement accompanying the report. “The structural and cyclical pressures facing the economy are expected to continue.”
The PMI for Asia excluding China and Japan was little changed in October, while a gauge of export orders improved the most since May, another sign of dumping. advance into the area before the tariffs announced by Trump.
In China, domestic demand benefited from Beijing’s subsidies for domestic purchases of home appliances, cars and appliances. exchange programalthough economists say more policy support is needed to maintain growth momentum.
“These plans are merely boosting demand, while real estate transactions are unlikely to improve materially unless implemented,” said Kelvin Lam, China economist at Pantheon Macro Economics. The outlook for employment, income and inflation is brighter.
Caixin’s results were largely better than those from an official poll last year as exports remained strong. The two surveys covered different sample sizes, locations and business types, with the separate survey focusing on small and export-oriented businesses.
Export data released last month showed that exports in the first three quarters of the year soared to the second record high in history, in a boom that pushed China towards a record trade surplus with can reach almost 1 trillion USD this year.
At the end of September, China made drastic interest rate cuts and announced measures to strengthen the housing market. That prompted some analysts to raise their outlook for China’s growth in 2024, raising the average forecast for growth this year to 4.8%, according to estimates compiled by Bloomberg.
