CHART OF THE WEEK
The PMI (1) manufacturing index, published by the Chinese National Statistics Office, reached a new low in November since July 2016, reducing from 50.2 to 50.0. The component measuring new export orders is stabilising, although remaining reduced seeing it has fallen by four points over the past six months.
OUR ANALYSIS
For the time being, foreign trade statistics do not exhibit a decline in Chinese exports, despite tensions regarding trade relations with the United States. After an increase of 7.9% in 2017, they rose by 12.6% over the first ten months of the year. The deterioration of new export orders, nonetheless, raises concerns over a possible trend reversal in months to come. Such a turn of events would reinforce pressure on manufacturing sectors. On a brighter note, Service Sector PMI indices are up (52% of GDP); this could hence partially compensate for the industry slowdown.
PMI (1): Purchasing Managers’ Index, an indicator of economic health for manufacturing and service sectors
The opinion expressed above is dated December 6th 2018, and liable to change.
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