Monday, 2 November 2015

Down again but better than before! ​China Caixin Oct PMI ​rises to 48.30 vs 47.20 in Sept

Manufacturing PMI in China averaged 49.44 from 2011 until 2015, reaching an all time high of 52.30 in January of 2013 and a record low of 47.20 in September of 2015.


China Service PMI
The final Caixin Manufacturing PMI in China increased to 48.30 in October of 2015 from 47.20 in September. ​This may be the highest reading since May​ but the fact remains that the PMI level has remained below 50 for the eight month​ in a row​. ​The PMI constitutes for five prime components that are given different weights. These subcomponents of the PMI are:

1. The production level (25%)
2. New orders from customers (30%)
3. Supplier deliveries (15%)
4. Inventories (10%)
5. Employment level (20%)

All of these are concerned with the supply side of an economy, however shouldn’t be confused with WPI or the RPI, as they mainly deal with the industry, or the manufacture level of production. The PMI figure varies between 1 to 100, wherein 50 would mean equal number of correspondents reporting “better conditions” or “worse conditions”.

Any value over 50 indicates an expansion in business activity or an improvement, whereas lower than this median reflects poor performance, or a contraction.

Meanwhile, purchasing activity and inventories of inputs continued to fall amid reports of lower production requirements. Manufacturing PMI in China averaged 49.44 from 2011 until 2015, reaching an all time high of 52.30 in January of 2013 and a record low of 47.20 in September of 2015.

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