Surprise SME surge pushes China’s PMI to a two-year high
Index rose to its highest level since July 2014, boosted by growth in new orders and improved readings from small and medium-sized enterprises
China’s official Purchasing Managers’ Index increased to its highest level since July 2014 in October, supported by growth in new orders and production activity. Improved readings from small and medium-sized enterprises led the jump while those from larger producers declined marginally.
The factory gauge reached 51.2, up from 50.4 during the previous two months, representing its fastest pace of growth since March 2011, according to statistics released by the National Bureau of Statistics on Tuesday morning. The numbers chimed with a separate reading from finance weekly Caixin. Any number above 50 signifies an expansion.
“China’s economy is stabilizing, mostly due to government policies,” said Zhong Zhengsheng, director of Macroeconomic Analysis at CEBM Group, a subsidiary of Caixin Insight Group. He worried, however, that factory production could slow down when government measures are stopped.
“The continuous rise in prices has further stimulated production,” said Zhao Qinghe, a senior National Bureau statistician. The Raw Material Purchase Price Index increased to 62.6 from 67.5 last month.
- The index for large enterprises dropped to 52.5 by 0.1 compared to last month; that for small and medium-sized enterprises increased to 48.3 and 49.9 respectively, by 2.2 and 1.7
- Indexes for production and new orders increased to 53.3 and 52.8 respectively, up by 0.5 and 1.9; those for new export orders and imports were 49.2 (down 0.9) and 49.9 (down 0.5) respectively
- More than 40% of enterprises have limited liquidity and demand, especially small and medium-sized enterprises, statistician Zhao said
- Non-manufacturing PMI increased by 0.3 to 54, with a “speedy growth” in the construction sector