Activity in China’s manufacturing sector accelerated during November as higher producer prices and a recovery in market demand kept factory floors operating in a higher gear.
This is in-line with the gains seen in railway cargo volume and electricity generation figures, two of the three economic indicators highlighted by Premier Li Keqiang.
The official manufacturing Purchasing Managers’ Index (PMI) came in at 51.7 in November, the fourth straight month of expansion and the highest November figure for two years, beating the median forecast of 51 polled by Reuters. Any number above 50 signifies expansion.
A key bright spot of the figures lies with fact that the employment index rose to 49.2 (+0.4), the highest since November 2013. It means that China’s manufacturing jobs are being shed at the slowest pace in three years, foretelling a fundamental improvement in the industrial economy.
This is in line with the State Council’s goal of fostering a better business environment to stimulate job creation.
The new exports index surged 1.1 percentage points up to 50.3, reversing October’s brief dip into the sub-50 territory, signaling a potentially improving outlook regarding foreign trade.
The production index was 53.9, an increase of 0.6 percentage points indicating that manufacturing production has kept growing for the past four months, according to the report by National Bureau of Statistics released on Thursday morning.
The new orders index was 53.2, up 0.4 percentage points from last month, showing that the growth of manufacturing market demand accelerated.
Large and medium-sized enterprises were the main gainers this time, with large-sized enterprises gaining 0.9 percentage points compared to last month, clocking in at 53.4. Medium-sized enterprises also continued their growth to 50.1, an increase of 0.2 last month, while small-sized enterprises decreased 0.9 to 47.4.
In November 2016, China’s non-manufacturing PMI was 54.7%, an increase of 0.7 percentage points over the previous month, a new high for the year, showing that non-manufacturing industry kept expanding with sound growth rates led by the service industry.
The service industry index stood at 53.7, up 1.1 from last month, led by Chinese consumer sectors.
Sectors such as railways, retail, postal service, water transportation, internet, software and information technology services, financial, capital market and insurance services all recorded “rapid growth,” according to NBS.