China’s manufacturing slowed further in October, as a property slump and slowdown in investment growth put the world’s second-largest economy on course for the slowest full-year growth since 1990.
The government’s Purchasing Managers’ Index was at 50.8 in October, trailing the 51.2 median estimate of analysts in a Bloomberg News survey and compared with September’s 51.1. Readings above 50 indicate expansion.
A pullback in manufacturing will test the government’s determination to refrain from broad stimulus. The economy expanded 7.3 percent in the third quarter from a year earlier, the weakest pace in more than five years.
Fra BofA Merril Lynch
- Output growth of non-ferrous metals, steel and cement slowed to 8.2%,
1.7% and – 2.2% yoy respectively in September from 9.5%, 2.4% and 3.0% in August.
- Headline year-to-date FAI growth slowed to 16.1% yoy in September from 16.5% yoy in August, below the consensus of 16.3%. Real ytd FAI growth also moderated to 15.3% yoy in September from 15.8% yoy in August.
- Investment growth of local projects (88% of total FAI) edged down to 13.3% yoy in September from 13.4% yoy in August.
- Real estate ytd FAI growth moderated to 12.5% in September from 13.2% in August as home new starts remain weak.
- Retail sales growth eased to 11.6% yoy in September from 11.9% in August, but quickened in real terms due to falling CPI inflation.
- Growth of total auto sales and passenger car sales in volume decreased to 2.5% and 6.4% yoy in September from 4.0% and 8.5%, respectively in August.
- China’s CPI and PPI inflation declined to 1.6% and -1.8% in September yoy from 2.0% and -1.2% in August, below consensus forecasts. Falling inflation in China was due to slower economic growth, the anti-corruption campaign which damped consumption demand, and the decline in global oil and gas prices.
- Food inflation softened to 2.3% yoy in September from 3.0% in August, while nonfood inflation decreased to 1.3% from 1.5%.
- The yoy growth of outstanding bank loans edged down to 13.2% from 13.3% in August, meanwhile that of outstanding TSF decreased to 15.6% from 16.1% in August.
- In volume terms, growth of iron ore imports picked up to 13.6% yoy in September from 8.5% in August due perhaps to falling prices, while that of copper and crude oil imports declined to -14.8% and 7.4% yoy, respectively in September from -13.3% and 17.5% in August
- In yoy terms, the number of cities that saw new home prices down/flat/up changed to 58/2/10 in September, compared to 19/3/48 in August.
- On the demand side, the yoy growth of new home sales in floor space terms and value terms picked up to -12.1% and -10.3% yoy in September from -13.4% and -13.7%, respectively, in August. However, in ytd terms, home sales growth in both value and volume terms moderated slightly in 9M14 from 8M14.
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And so, with Europe, Japan and, now, China slowly sinking into what can be described a global period of economic slowdown, the only hope is that the US will decouple from… well… everyone, as slowly but surely seems to be happening:
