China's factory activity hits quickest expansion in 10 years in November, driven by a burst in output and new orders
- China's factory activity expanded at the fastest pace in ten years as the world's second-largest economy recorded higher output and new orders in November.
- Data released Tuesday showed manufacturing firms in China responded to an improvement in domestic demand, as growth in new export work was not as pronounced.
- China's upbeat activity boosted the rate of job creation to its fastest since May 2011.
- "We expect the economic recovery in the post-epidemic era to continue for several months," a senior economist at IHS Markit said.
China's factory activity grew at its quickest rate in a decade in November, as the economic recovery led to manufacturing firms processing higher volumes and recording an improvement in new orders, according to data released Tuesday.
Manufacturing companies posted the strongest improvement in overall activity a decade, rising for a seventh month in a row. The Caixin China General Purchasing Managers Index (PMI) rose to 54.9 in November from 53.6 last month.
PMI survey data is widely used to track business trends across the world's biggest economies. A reading of 50 separates expansion from contraction.
A breakdown of the report showed manufacturing sector employment rose at its fastest pace since May 2011, while measures of demand showed domestic consumption was the engine of growth last month, rather than exports. Some of China's main importing customers, such as the United States and the eurozone, continue to struggle with the economic fallout of the pandemic, which has undermined consumer and producer demand.
"Manufacturing enterprises added to their inventories to meet demand and they were quite confident about the economic outlook for the next 12 months," Dr. Wang Zhe, senior economist at Caixin Insight Group, said in a statement. "We expect the economic recovery in the post-epidemic era to continue for several months."
Companies increased purchases of production requirements, but it took a lot of time to receive them. Higher demand for input materials led to a rise in costs, and in turn, companies raised their own selling prices.
Positive data from China shows that it is the first economy to successfully emerge from the COVID-19 pandemic with not only fewer deaths and cases of the virus, but also with a robust recovery.
Equity investors took heart from the data, pushing China's Shanghai Composite up 1.7% and Hong Kong's Hang Seng up by 0.8% at the close of trading.