1888 PressRelease – Burton Mills: Activity in China’s manufacturing sector slowed somewhat but remained resilient this month.
Taipei, Taiwan based Burton Mills economists say that activity in China’s factory sector probably expanded at a marginally slower pace this month, as export orders decreased and stringent anti-smog regulations placed pressure on northern factories and steel mills to limit production.
However, Burton Mills economists added that growth is expected to have remained solid with demand for steel persisting as factories and mills in southern provinces with less rigid anti-pollution regulations ramp up output to increase their market share.
China’s campaign against smog is affecting the GDP forecast for the world’s second biggest economy while the world’s markets harbor concerns regarding Beijing’s strategy to decrease debt and excesses in the financial sector.
Burton Mills economists expect this week’s official manufacturing Purchasing Managers’ Index (PMI) to come in at 51.4 for this month, down slightly from 51.6 the month before.
While factory activity has slowed somewhat for a second consecutive month, it would still be the 16th consecutive month of growth, echoing opinions that China’s factory industry remains buoyant in spite of a series of obstacles.
A recovery for China’s industrial companies and factory sector fueled by increased state expenditure, a robust property market and unanticipated growth in exports has contributed to the economy posting better than forecast expansion of almost 6.9 percent in the first three quarters of this year.
Profits for China’s largest industrial companies increased by 25.1 percent last month, decreasing only marginally from September’s nearly six year high. Upstream sectors and coal mining felt the benefit of robust commodity prices.
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