Business / Macro

Manufacturing PMI expected to hit 6-month low

By Chen Jia ( Updated: 2014-01-23 11:29

The manufacturing Purchasing Managers Index, a gauge to indicate the sector's operating conditions, is expected to retreat to 49.6 in January from 50.5 in December, in a six-month low, the British bank HSBC reported on Thursday.

A PMI sub-index to show the output situation slightly slipped to a three-month low of 51.3 in January, compared with 51.4 in December.

Manufacturing PMI expected to hit 6-month low

Any PMI reading that is below 50 means contraction in the manufacturing industry, while above 50 indicates expansion.

Qu Hongbin, chief economist in China and the co-head of Asian Economic Research at HSBC, said the marginal contraction of January's preliminary HSBC PMI figure was mainly dragged down by cooling domestic demand conditions.

"This implies softening growth momentum for manufacturing sectors, which has already weighed on employment growth," he said.

Qu suggested the policy tilt towards supporting growth to avoid repeating growth deceleration seen in the first half of 2013 amid relatively moderate inflation.

This estimate of January's PMI is typically based on about 85 to 90 percent of total PMI survey responses for the HSBC each month and is designed to provide an accurate indication of the final PMI data.

The official PMI data will be released on Feb 1 and the HSBC will report its final PMI data on 30 January.

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