China Oct official manufacturing PMI beats forecasts

by **hlk** Fri 01 Nov 2013, 13:06

Business & Markets 2013
Written by Reuters
Friday, 01 November 2013 10:55
A + A - Reset
BEIJING (Nov 1): China's manufacturing sector grew at the fastest pace in 18
months in October, official data showed on Friday, adding to signs of a
stabilisation in the world's No.2 economy as the government readies a series of
key economic reforms.
The survey's strength offered some relief on the growth outlook after a
disappointing run of data last month, including a below-forecast official PMI and
a surprise drop in exports.
The official Purchasing Managers' Index (PMI) stood at 51.4 last month, up from
September's 51.1 and above a forecast of 51.2 in a Reuters poll of economists.
"This is in line with our relatively benign growth outlook," said Louis Kuijs, an
economist at RBS, in a note.
"With global demand momentum likely to pick up gradually and domestic
demand growth remaining solid, we expect GDP growth to comfortably exceed
the government's bottom line in the coming quarters."
A breakdown of the sub-indexes showed that new orders in large industries
reached 53.8, while for small industries the number was just 48.8, suggesting
that the trend towards stabilisation has still largely only been felt by larger firms.
"The PMI data for October shows a continued increase, indicating a preliminary
stabilisation in the economy," Zhang Liqun, an economist at the cabinet
think-tank Development Research Center, said in a statement released with the
PMI.
"The foundation for a recovery is not yet solid."
Signs of improvement will help the government push its reform agenda at the upcoming Communist Party's third plenary meeting from Nov.
9 to Nov. 12.
In the first nine months of the year, the economy grew 7.7 percent from a year earlier, putting it on track to achieve Beijing's 2013 target of
7.5 percent, although that would still be the weakest growth rate in 23 years.
Economists in a recent Reuters poll saw the economy growing an annual 7.5 percent in the fourth quarter from 7.8 percent in the third