China's official manufacturing PMI published yesterday by the National Bureau of Statistics (NBS) in January declined to 49.8 (consensus: 50.2, DBM: 50.3) from 50.1 in December. This is the fourth month in a row with a decline in the NBS manufacturing PMI and it is now at its lowest level since September 2012. The HSBC/Markit manufacturing PMI in its final reading released this morning improved marginally to 49.7 (revised down from 49.8) from a final reading of 49.6 in December last year.
The details in the NBS manufacturing PMI were relatively weak with new orders declining slightly to 50.2 from 50.4 and export orders declining to 48.4 from 49.1. In the HSBC/Markit manufacturing PMI new orders in January improved slightly to 50.1 from 49.7, while the export order component declined to 50.2 from 51.5 in December. Hence, both manufacturing surveys suggest there has been a slight deterioration in China's export conditions in January.
In both surveys manufacturers continue to cut inventories of both finished goods and inputs in January at a broadly similar pace as in December. However, the overall trend has been a slight deterioration in the new order-inventory-balance in recent months albeit the overall level remains neutral.
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