The initial value of HSBC China manufacturing purchasing managers index (PMI) for November released yesterday falls to 50.0, hitting a 6-month low. An analyst believed that the further decline of the HSBC China PMI shows that the small and medium-sized manufacturers still record unsatisfactory performance and the government is likely to introduce more monetary and fiscal stimuli to address the economic slowdown.

Zhang Xiaolei, director of the Research Institute of Jinpeng Futures, said that the decline of the PMI was mainly caused by a large number of factories in and around Beijing suspending production during the APEC meeting. Currently, the domestic job market has shown the sign of further going weak, and the low capacity utilization demonstrates the insufficient demand with the pressure for economic downturn not reduced and the pressure for deflation still existing. 

Judging from the sub-indexes, in November, the index of raw material inventories declined significantly and the purchasing volume index fell into the contraction range, showing that the inventories and demands were still going down. In addition, affected by the dropping index of new export orders, the output index fell from 50.7 in the last month to 49.5, the lowest since April this year. In this regard, macroeconomic analyst Zhao Xianwei believed that the decline of the index of new export orders indicates that the external demand has not shown significant rebound, which is in line with the import data released previously. Since the third quarter, the European economy has seen great uncertainties in recovery, which has imposed some pressure on the business of China’s small and medium-sized manufacturers. In November the domestic order index showed small rebounds, which, Zhao believed, is related to the government significantly increasing the spending on infrastructure recently. It is noteworthy in the future.