Tuesday’s indicators showed that Chinese industry activity expanded at the fastest pace in a decade last month, in the latest indication that the world’s second economy is doing well and on the path to recovering from the consequences of the Coronavirus crisis..
The Chinese “Purchasing Managers Index”, which was published by the “Chaixin” Media Corporation, came a day after the official figures also showed the fastest growth in more than three years..
The Purchasing Managers Index is a major measure of factory activity in industrialized countries, and the Chaixin index covers small and medium enterprises, and some see it as a more accurate reflection of the Chinese economy compared to official government figures that track the state of large companies.
The index, which recorded 54.9 percent in November, beat expectations that were close to the October index result of 53.6 percent, the strongest since October 2010. It is worth noting that any number greater than 50 percent is considered growth..
The data says that manufacturing companies recorded a “significant and accelerating rise in production” in November, attributing this to an increase in the volume of demand and a recovery from disruptions caused by Covid-19 earlier this year..
“The fundamental data indicate that the more stable domestic demand continued to lead the recovery,” Chaixen said“.
But she added that despite the significant increase in the purchase movement, there was a delay in receiving the goods in addition to reports of a lack of stock with suppliers..
The official purchasing managers’ index for October recorded 52.1 percent, according to data published Monday, surpassing the 51.4 percentage recorded in the previous month, bringing industrial activity back to September 2017 levels..
Julian Evans-Pritchard, chief economist on China at the consultancy Capital Economics, said the employment component was “particularly encouraging”, adding that the improvement in the labor market would be a catalyst for a further recovery in consumption..
Capital Economics added in its report that the export factor was also important, as the two indicators indicate that “external demand for products related to Covid-19 remains strong, amid new closures abroad and hints of an additional acceleration in export growth in the near term.”“.
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