We had similar reports from the monthly surveys of manufacturing from some economies yesterday and overnight.
Worrying investors in Asia yesterday was an unexpected slight slowing in the growth in China’s manufacturing sector
China’s official manufacturing Purchasing Managers Index fell to 50.4 in October from the prior month’s reading of 51.2, the China Federation of Logistics & Purchasing said yesterday.
But also as expected the final estimate of the PMI, published by HSBC, was at 51.0, rising from a mildly contractionary 49.9 reading in September, but slightly down from the flash reading last week of 51.1.
Both indexes were positive and above the 50 level that expansion from contraction.
Despite the similar results from the two PMI surveys, comments accompanying the data painted somewhat different pictures.
The official CFLP report said the drop indicated the country’s economic growth might continue to slow down in the fourth quarter, but the trend of a moderate economic increase would not change fundamentally.
It estimated the country’s gross domestic product, or GDP, would grow around 9.2% this year.
A sub-index of the official PMI showed that new orders fell to 50.5 in October from 51.3 in September, while new export orders contracted, dropping to 48.6 from 50.9 in September.
But in a sign that inflation is under control, the input prices sub-index of the PMI dropped 10.4 percentage points in October from a month earlier, to 46.2, suggesting that some prices for manufacturing inputs could now be easing.
But HSBC was more upbeat in its commentary, saying that the "October data signalled a stronger expansion of manufacturing output in China, as overall new business rose for the first time in three months.”
"Renewed growth of new export orders was also signalled, while companies raised their purchasing at the fastest rate since March," it said.
However, Zhang Liqun, an analyst with China Federation of Logistics & Purchasing which compiles the government PMI, said that the October reading “signals that future economic growth will continue to slow."
The Indian PMI from HSBC showed a surprising increase last month, rising to 52 from 50.4 in September due to growth of domestic new business orders.
HSBC said in a statement that Indian manufacturers reported a solid rise in new business orders received in the month of October, said the report.
The report said, "The rate of new order growth remained below the historical average, which was, in part, due to a further decrease in new business received from export markets.
"Demand in key export countries continued to be affected by softening global economic conditions."
Input and output prices rose substantially in October with higher raw material and transport costs as the main driver of cost increases, said the report. Inflation is not showing signs of easing and interest rates have been lifted numerous times this year to try and bring it under control.
And buried in all the chat about the Melbourne Cup and yesterday’s rate cut was a sharp improvement in the Australian manufacturing sector last month.
The Australian Industry Group/PriceWaterhouseCoopers performance of manufacturing index (PMI) climbed 5.1 points in October to 47.4.
While still well below the 50 level that marks the threshold between contraction and expansion, the improvement was something of a surprise.
The survey of over 200 companies showed softness in the clothing and footwear and paper, printing and publishing sub-sectors.
But the textiles; basic metals; transport equipment and miscellaneous manufactures sub-sectors recorded the strongest expansions, in part thanks to stronger demand from mining.
And the survey’s measure of employment jumped 5.9 points to 51.6, the first reading above 50 in 12 months, according to the report.
Improvements in employment were recorded in the textiles; chemicals, petroleum and coal products; basic metals; transport equipment; machinery and equipment; and miscellaneous manufactures sub-sectors.
The survey’s measure of output rose 6.7 points to 45.9 in October, while the index of new orders firmed 2.3 points to 46.9. The index of inventories rose 4.7 points to 47.0 while that for exports climbed 9.9 points to 47.0.
China wasn’t the only major economy to see a slowing in the rate of expansion in its manufacturing sector.
The huge US manufacturing sector saw a slowing last month as well.
The survey from the Institute for Supply Management showed an easing to 50.8 from 51.6 in September.
US economists said the news frustrated hopes the survey would show a pick-up in factory activity.
And like China, the survey found good news in the sub-indexes.
In the US there was a rise in the new orders index for the first time in four months, to 52.4 from 49.6, while the prices paid index fell to its lowest level since April 2009, to 41.0 from 56.0.
Economists reckon this result means the US economy isn’t dipping into recession soon, but it certainly isn’t expanding strongly enough to make a dent in unemployment.
