Markit / Caixin PMI comes in at 51.5 for a miss on expectation and below the November result.
- expected 51.6, prior 51.8
- the official PMIs were released earlier this week, here
Comments from the report from Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group (bolding is mine):
indicating a moderate expansion of the manufacturing sector
- 1) Domestic demand expanded, but less quickly than in the previous two months. While the subindex for total new orders fell further in December from its high in October, the gauge for new export orders fell more slowly, suggesting growth in domestic demand is slowing more rapidly.
- 2) Production expanded at a relatively quick clip, helping stabilize the labor market. The output subindex remained at a relatively high level, despite dipping slightly. The employment subindex fell marginally from the previous month, to the border between contraction and expansion.
- 3) As production expanded at a relatively fast pace, input deliveries, order backlogs and inventories all saw positive changes. The subindex for suppliers' delivery times rose to its highest point since April, despite remaining in contractionary territory. The measure for backlogs of work continued its fall from October's recent high, but remained in expansionary territory. The subindex for inventories of purchased items rose further into positive territory, but the gauge for stocks of finished goods also rose and returned to expansionary territory.
- 4) Behind the good performance was an improvement in business confidence. The gauge for future output expectations rebounded, albeit remaining at a relatively low level in recent years.
- 5) Industrial product prices went up. Both the gauges for input costs and output prices rose slightly. Company profitability is likely to improve, as the gauge for output prices returned to expansionary territory.
"China's manufacturing economy continued to stabilize in December, although the expansion in demand was not as strong as the previous two months. Positive changes included improved business confidence, and strengthened willingness to increase production and inventories, which are beneficial to the job market. Subdued business confidence was a major factor behind the economic slowdown this year. As the phase one trade deal between China and the U.S. has sent out positive signals, there is room for a recovery in business confidence, which should be able to help stabilize the economy."
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S bit of a mixed lot in this report. At 51.5 it is in expansion and on balance the positives outweigh the negatives. But its not a great report by any means.
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Earlier:
- Asian economies manufacturing PMIs (nearly) all improve in December
- Australia - CBA Manufacturing PMI for December, final, 49.2
Still to come - Caixin services and composite PMIs for China are due on January 6
