HSBC Manufacturing PMI For China And India Expands Marginally

The HSBC India manufacturing PMI stands at 50.7 in December against 51.3 in November indicating second month of consecutive improvement in the business environment. The manufacturing activity across the country rose for straight second month, backed by the consumer goods sector. The new orders placed across the manufacturing sector rose marginally in December exhibiting the improved domestic and overseas demand. The export orders have registered for straight third month.

The manufacturing employment rose marginal during December across all three broad areas. The overall inflation continued to be at higher side. The input costs such as raw material cost increased marginal compared to previous month. However, the prices of output rose for the straight seventh month consecutively. The current PMI data suggests rise in purchasing activity across the country. However, the pre-production inventories felt for the first time since September with moderate rate. Furthermore, the order backlogs increased again since last announcement and reached to 6 months high.

The HSBC China manufacturing PMI signaled marginal expansion in the economy with moderate rate of growth in Chinese economy. The China PMI stood at 50.5 in December, down slightly from 50.8 in November. This was the straight five month the manufacturing activity expansion in China. However, the rate of growth was moderate and mainly supported by increased new work. The payroll numbers declined for consecutive second month in December due to non-replacement of voluntary leavers. However, the overall inflation is continue to be on higher side for straight fifth month in December. Though, the rate of input price inflation is seen eased slightly in this month.

According to Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, “the moderation of December's final HSBC China Manufacturing PMI was mainly due to slower output growth. However, the final PMI sustained the fifth above-50 reading in a row thanks to a steady increase of new orders. The recovering momentum since August 2013 is continuing into 2014, in our view. With inflation still benign, we expect the current monetary and fiscal policy to remain in place to support growth."