HSBC China Composite PMI™ data (which covers both manufacturing and services) signalled an increased amount of output for the fifth successive month in December. The rate of expansion eased from November’s eight-month high, though remained modest. This was
signalled by the HSBC Composite Output Index posting at 51.2 in December, down from 52.3 in November.


Chinese manufacturers reported a further expansion of output in December. Despite having eased over the month, the rate of growth remained moderate overall. Service providers also reported increased business activity in December. That said, the rate of growth eased to a
marginal pace that was the weakest since August 2011. The latter was signalled by the HSBC China Services Business Activity Index posting at 50.9 in December, down from 52.5 in November.

New business rose across both the manufacturing and service sectors in December. Goods producers reported a modest expansion that was similar to the previous month. Service providers also signalled a modest rate of new order growth in December, though it was the weakest in six
months. Consequently, total new work increased at a moderate pace at the composite level.

December data signalled divergent trends by sector for employment. Chinese manufacturers reported net job shedding for the second successive month, while service providers saw payroll numbers increase for the fourth month in a row. Moreover, it was the strongest expansion
of workforce numbers in the service sector since June. At the composite level, staffing levels were broadly unchanged for the second month running.

The level of work-in-hand at manufacturers increased for the fifth consecutive month in December. The rate of accumulation was moderate, despite having eased slightly from November. Meanwhile, service providers signalled a reduced amount of outstanding business, following no change one month previous. That said, the rate of depletion was only slight. At the composite level, backlogs of work increased for the fifth month in a row, albeit marginally.

Average input costs increased across both the manufacturing and service sectors in December. That said, the overall rate of inflation was modest and the weakest in five months.

In December manufacturers cut their factory gate prices for the first time since July, albeit fractionally. In contrast, service providers raised their selling prices for the fifth successive month. As a result, average tariffs increased slightly at the composite level.

Latest data signalled that Chinese service providers were optimistic towards the 12-month business outlook in December, with 26% of panellists expecting output to increase. However, the degree of positive sentiment remained historically weak, despite improving from the
previous month.


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