Thursday, November 22, 2012

China manufacturing grows after 13-month slide

(AP) ? China's manufacturing expanded for the first time in 13 months in November in a further sign that the world's No. 2 economy is recovering from its deepest slump since the 2008 global crisis.

HSBC Corp. said Thursday that its monthly Purchasing Managers' Index improved to 50.4 for November on a 100-point scale on which numbers over 50 indicate expansion. That was a moderate improvement from October's 49.5. It is the first time in 13 months that the reading has been above 50.

The PMI index measures overall manufacturing activity by surveying numerous indicators including orders, employment and actual production.

The Chinese numbers are rare good news for the world economy, which has slowed as Europe's chronic debt crisis worsened and the American economy stagnated.

HSBC economist Qu Hongbin said the survey shows that China's economic recovery is gaining momentum, but still remains fragile.

"This calls for a continuation of policy easing to strengthen the recovery," the analyst wrote.

Chinese leaders have cut interest rates twice since early June and are pumping money into the economy through higher spending by state companies and on building airports and other public works. They have avoided a larger stimulus after their multibillion-dollar spending in response to the 2008 global crisis fueled inflation and a wasteful building boom.

Analysts have cautioned that a Chinese recovery is likely to be "L-shaped," meaning the decline might have stopped but improvements in growth should be gradual. That would be a setback for exporters of commodities and other goods that are counting on China to help drive a rebound in global demand.

The HSBC report is based on data compiled from questionnaires sent to purchasing executives in over 420 manufacturing companies.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-11-21-China-Manufacturing/id-1c86fef6644f4b01acf2e7db6bca10b8

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