BEIJING: Manufacturing activity in China expanded at its fastest pace in more than two years last month on improving production and demand, an official measure showed Tuesday, boding well for the world’s second-largest economy.
Investors closely watch the purchasing managers’ index (PMI), which gauges conditions at Chinese factories and mines, as the first indicator of the health of the economy each month.
The PMI came in at 51.2 for October, its highest since July 2014, figures from the National Bureau of Statistics (NBS) showed.
It rose from September’s 50.4 and was well ahead of the median forecast of 50.3 in a Bloomberg News survey of economists.
A figure above 50 signals expanding activity, while anything below demonstrates shrinkage.
“Production and market demand is picking up again, accelerating expansion,” NBS analyst Zhao Qinghe said in a statement.
But Zhao added that downward pressures remain on imports and exports due to the sluggish recovery in global growth.
The key manufacturing sector has been struggling for months in the face of sagging world demand for Chinese products and excess industrial capacity left over from the country’s infrastructure boom.
“This might be as good as it gets,” HSBC Holdings economic researcher Frederic Neumann told Bloomberg.
