The slowdown in China continues, as evidenced by contraction in China Flash Manufacturing PMI, now at a seven-month low.
Key points:
- Flash China Manufacturing PMI™ at 49.5 in December (50.0 in November ). Seven-month low.
- Flash China Manufacturing Output Index at 49.7 in December (49.6 in November ). Two-month high.
Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said: “The HSBC China Manufacturing PMI dropped to a seven-month low of 49.5 in the flash reading for December, down from 50.0 in November. Domestic demand slowed considerably and fell below 50 for the first time since April 2014. Price indices also fell sharply. The manufacturing slowdown continues in December and points to a weak ending for 2014. The rising disinflationary pressures, which fundamentally reflect weak demand, warrant further monetary easing in the coming months.”
China PMI and Production
The question, as always is whether or not this is just more meandering around above and below the expansion-contraction line.
I propose energy is the key tell. With prices plunging, how much traction does the global economy have?
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com