Survey shows China's manufacturing improving
BY JOE MCDONALD Associated Press
Thursday, October 25, 2012
10/25/12 at 3:24 AM
BEIJING - China's manufacturing improved this month, adding to signs a recovery might be taking shape after a sharp slump in the world's No. 2 economy.
A preliminary version of HSBC's monthly purchasing managers' index rose to a three-month high of 49.1 points on a 100-point scale, the bank said Wednesday. That still was below the 50-point level that indicates a contraction but was a strong improvement from September's 47.9.
That added to data last week that showed retail sales and investment picking up. Economic growth in the three months ending in September fell to a three and a half year low of 7.4 percent but the decline was much gentler than in earlier quarters. Activity grew by 2.2 percent over the previous quarter, the biggest such gain in a year.
HSBC Corp. said the preliminary reading is based on responses from 85 to 90 percent of the 420 companies it surveys each month.
"October's flash PMI reading continues to recover for the second month, thanks in part to a gradual improvement in the new orders index, which picked up to a six-month high," said HSBC economist Hongbin Qu in a statement.
But Qu warned that challenges "still abound" and the job market faces pressure.
The Chinese numbers are rare good news for the world economy, which has slowed as Europe's chronic debt crisis worsened and the American economy stagnated.
Analysts have cautioned that a Chinese recovery is likely to be "L-shaped," meaning the decline might have stopped but improvements in growth should be gradual. That would be a setback for exporters of commodities and other goods that are counting on China to help drive a rebound in global demand.
The slowdown was due largely to government curbs imposed to cool an overheated economy and reduce reliance on exports by encouraging more domestic consumption. The slump worsened last year after global demand for Chinese goods plunged unexpectedly.
Chinese leaders have cut interest rates twice since early June and are pumping money into the economy through high spending by state companies and on building airports and other public works but have avoided a large stimulus.
Original Print Headline: Chinese production decline now slowing
A worker prepares to hoist parts at the assembly line at a bus manufacturer in Dandong city, in northeast China's Liaoning province, on Oct. 20. China's manufacturing improved this month, adding to signs a recovery might be taking shape after a slump in the world's No. 2 economy. Associated Press