logo
  Join        Login             Stock Quote

Keeping An Eye On The China Slowdown

 March 22, 2012 11:23 AM


12 months ago most scoffed at the idea that the Chinese economy was headed for a slowdown, now the debate has shifted to whether it will be a hard or soft landing. There are severe imbalances in the Chinese economy that are now acknowledged by all but the staunchest of bulls. A rebalancing of the Chinese economy will no doubt involve some pain. The track record of centrally planned economies avoiding difficulties is not a good one. China will be no different.

The latest preliminary reading of the HSBC Chinese PMI showed further contraction in the manufacturing sector in March. From marketwatch.com:

China factories slumping amid low demand

[Related -Integrated Device Technology Inc. (IDTI) Q1 Earnings Preview: Another Beat and Pop?]

HONG KONG (MarketWatch) — Chinese factory activity is slowing sharply, dragging on employment amid a deepening slowdown in global demand and aggravated by a stall in domestic consumption, according to March survey data showing new orders at a four-month low.

A preliminary reading of HSBC's manufacturing purchasing managers' index for March, released Thursday, printed at 48.1 on a 100-point scale, down from a final reading of 49.6 in February.

The flash PMI is based on 85% to 90% of the total responses during a given month and is an early indicator of business conditions facing Chinese manufacturers.

Bleak tone

In comments accompanying the data, HSBC economist Hongbin Qu sounded a bleak tone, highlighting the impact of the weak demand upon hiring trends.

[Related -Herbalife Ltd. (NYSE:HLF) Q2 Earnings Preview: The Potential To Shock?]

"Weakening domestic demand continued to weigh on growth, as indicated by a slowdown in new orders, which came in at a four-month low," said Qu. "More worryingly, employment recorded a new low since March 2009, suggesting slowing manufacturing production was hindering enterprises' hiring desire."

The deterioration in orders matched a surprise slump in industrial-production growth, adding to the darkening outlook, which will play a role in factory managers' decisions.

"External demand remained in contraction territory, but the decline was at a slower pace, implying that there are no improvements in the demand outlook," Qu said.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageChipotle Mexican Grill, Inc. (CMG) Q2 Earnings Preview: Will Higher Traffic Offset Higher Costs the Key

Chipotle Mexican Grill, Inc. (NYSE:CMG) will host a conference call to discuss second quarter 2014 read on...

article imageNetflix, Inc. (NFLX) Q2 Earnings Preview: The Ruby Month for a Reason

Netflix, Inc. (NASDAQ:NFLX) will post its second-quarter 2014 financial results and business outlook on its read on...

article imageLadenburg Thalmann Financial Services (NYSEMKT:LTS): Heavy, Durable Insider Buying

Ahh, but any worries over price levels didn’t stop multiple insiders at Ladenburg Thalmann Financial read on...

article imageInternational Business Machines Corp. (IBM) Q2 Earnings Preview: Small Beat and Pop

International Business Machines Corp. (NYSE:IBM) will host a conference call Wednesday, Jul. 16, 2014 at read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.