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4 Jan 2016
China: Sub-50 PMI points to weak growth in December - Nomura
FXStreet (Bali) - According to Nomura, China's official PMI, which came in at 49.7 vs 49.6 exp, points to weak growth in December.
Key Quotes
"The official PMI ticked up to 49.7 in December from 49.6 in November, slightly below expectations (Consensus and Nomura: 49.8). The 0.1 percentage point (pp) rise is stronger than the historical average November-December decline of 0.1pp over 2010-14."
"Many sub-indices saw modest rises in December, but most remained below the expansion/contraction threshold of 50. The output and new orders sub-indexes rose by 0.3pp and 0.4pp, respectively, to 52.2 and 50.2 in December. The improvement, in our view, was mainly driven by the new export sub-index which jumped by 1.1pp."
"It is still too early to judge if this reflected the impact of RMB depreciation or was due to some stabilization of external demand. Korea’s export growth slumped to -13.8% y-o-y in December from -4.7% in November, pointing to ongoing weakness in external demand."
"On domestic momentum, domestic demand showed few signs of strong expansion, as the improvement in new orders came mainly from export orders. Moreover, the employment sub-index fell to 47.4 in December, the lowest in 47 months, pointing to downside pressures on growth momentum."
"The 0.1pp uptick in the official PMI is consistent with mixed signals from other leading indicators (the MNI business sentiment index and Nomura’s proprietary China indices, see China: Growth may soften in December, 31 December 2015) and high-frequency data (Figure 1) suggest that headwinds remained strong in December."
Key Quotes
"The official PMI ticked up to 49.7 in December from 49.6 in November, slightly below expectations (Consensus and Nomura: 49.8). The 0.1 percentage point (pp) rise is stronger than the historical average November-December decline of 0.1pp over 2010-14."
"Many sub-indices saw modest rises in December, but most remained below the expansion/contraction threshold of 50. The output and new orders sub-indexes rose by 0.3pp and 0.4pp, respectively, to 52.2 and 50.2 in December. The improvement, in our view, was mainly driven by the new export sub-index which jumped by 1.1pp."
"It is still too early to judge if this reflected the impact of RMB depreciation or was due to some stabilization of external demand. Korea’s export growth slumped to -13.8% y-o-y in December from -4.7% in November, pointing to ongoing weakness in external demand."
"On domestic momentum, domestic demand showed few signs of strong expansion, as the improvement in new orders came mainly from export orders. Moreover, the employment sub-index fell to 47.4 in December, the lowest in 47 months, pointing to downside pressures on growth momentum."
"The 0.1pp uptick in the official PMI is consistent with mixed signals from other leading indicators (the MNI business sentiment index and Nomura’s proprietary China indices, see China: Growth may soften in December, 31 December 2015) and high-frequency data (Figure 1) suggest that headwinds remained strong in December."