China's December Caixin Manufacturing PMI way above expectations

China’s December Caixin Manufacturing PMI came at 51.9 vs 50.9 last, much stronger than expectations of a 50.9 reading. The data followed weaker China's government PMI of 51.4 vs 51.6 expected and 51.7 prior.

Summary

The seasonally adjusted Purchasing Managers’ Index™ (PMI™) – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – picked up from 50.9 in November to 51.9 at the end of 2016. Although modest overall, the latest reading pointed to the fastest rate of improvement in the health of the sector since January 2013.

Commenting on the China General Services PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China General Manufacturing PMI was 51.9 in December, up one point from the previous month and the strongest expansion since January 2013. The sub-indices for output and new orders both hit multi-year highs while those for input costs and output charges continued to rise rapidly, underlining sustained inflationary pressure.”

“The Chinese manufacturing economy continued to improve in December, with the majority of sub-indices looking optimistic. However, it is still to be seen if the stabilization of the economy is consolidated due to uncertainties in whether restocking and consumer price rises can be sustainable.”