BEIJING—China’s manufacturing sector is showing some renewed gusto, with figures released this weekend indicating the first pick-up in factory production in more than a year.
On Sunday, the HSBC Flash China Manufacturing Purchasing Manager’s Index (PMI) rose to its strongest level in 13 months. The index, which polls private factory managers about their production rates, was 50.5 in November, up from 49.5 a month earlier. Manufacturing is considered to be expanding when a PMI rises to 50 or above. An official PMI tally released over the weekend showed a similar upswing.
China’s manufacturing sector has sagged in recent months, as weak demand and lagging financial and credit support for industry has taken a toll on the country’s production bases.
An HSBC bank economist said in the report that signs are good, but a China’s manufacturing sector is not on completely solid ground just yet.
“As November’s flash reading of HSBC manufacturing PMI bounced back to the expansionary territory for the first time in 13 months, this confirms that the economic recovery continues to gain momentum towards the year end,” said Hongbin Qu, chief economist for China and co-Head of Asian Economic Research at HSBC said. “However, it is still the early stage of recovery and global economic growth remains fragile. This calls for a continuation of policy easing to strengthen the recovery.”
It its report, the China National Bureau of Statistics noted that employment remains a potential problem. Although China does not release official unemployment statistics, there are deep concerns over job losses in the manufacturing sector.
The country’s new leadership has set out some ambitious goals for China’s economy in the coming years, like doubling personal income, but has yet to spell out exactly how it plans to achieve those.