China December manufacturing index falls to 7-month low: HSBC

FE Team | Published: December 18, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

BEIJING, Dec 17 (AFP) : China's manufacturing activity worsened in December with HSBC's closely watched purchasing managers' index (PMI) hitting a seven-month low, the bank said Tuesday, signalling more weakness in the world's second-largest economy.
The British banking giant's preliminary PMI for the month came in at 49.5, below the break-even point dividing expansion and contraction, the bank said in a statement.
The result, compiled by information services provider Markit, was lower than November's final reading of 50.0 and the weakest result since May's 49.4. The December reading also marked the first move into the contraction range in seven months.
The index tracks activity in China's factories and workshops and is a closely watched indicator of the health of the Asian giant, a key driver of global growth.
"The manufacturing slowdown continues in December and points to a weak ending for 2014," Qu Hongbin, HSBC's chief economist for China, said in the statement.
"The rising disinflationary pressures, which fundamentally reflect weak demand, warrant further monetary easing in the coming months."
HSBC will publish its final reading for December on January 2, it said.
China's economy expanded 7.3 per cent in the third quarter, the government said in October, lower than the 7.5 per cent of the previous three months and the slowest since 2009 at the height of the global financial crisis.
It has showed continued weakness in the current fourth quarter.
The central People's Bank of China last month cut interest rates for the first time in more than two years to jolt slowing growth, but analysts say that further easing steps are needed.
China's official PMI released by the National Bureau of Statistics (NBS) came in at 50.3 in November, the weakest since an identical reading in March. The NBS is likely to announce December PMI on January 1.
The government on Friday announced that industrial output expanded at its slowest pace in three months in November, while retail sales and fixed asset investment data also pointed to weakness.