China Manufacturing Rebounds on Investment, CLSA Says (Update1)
Share | Email | Print | A A A
By Kevin Hamlin
May 4 (Bloomberg) -- Chinese manufacturing expanded for the first time in nine months after investment surged and declines in export orders moderated, according to a survey by CLSA Asia- Pacific Markets.
The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 50.1 in April from 44.8 in March, the investment bank said today in an e-mailed statement. A reading above 50 indicates an expansion.
The rebound in manufacturing adds to signs of recovery in the world’s third-biggest economy as China grapples with a collapse in world trade and a slowdown in property investment and construction. In today’s figures, an output index climbed to 51.3 from 44.3, the first expansion in nine months, and the measure of export orders rose to 48.8 from 41.4.
“China’s government has been extremely successful in stimulating investment,” said Eric Fishwick, head of economic research at CLSA in Hong Kong. The “sharp improvement in export orders” was the other factor behind the rebound, he said.
The Shanghai Composite Index of stocks rose 2 percent as of 10:41 a.m. local time. The yuan traded at 6.8208 against the dollar, unchanged from before the data was released.
A government-backed manufacturing index, released May 1, also showed an expansion.
Signs that China’s economy is reviving because of the government’s 4 trillion yuan ($586 billion) stimulus package include a 30 percent increase in urban fixed-asset investment in March from a year earlier. Growth in industrial output accelerated in March and new loans more than tripled to a record 4.58 trillion yuan ($670 billion) in the first quarter.
Sparking a ‘Turnaround’
Caterpillar Inc., the world’s largest maker of bulldozers and earth-moving equipment, said April 22 that spending on infrastructure was sparking a “turnaround” in China. The government’s projects range from low-cost housing to a high- speed rail link between Shanghai and Nanjing.
The new-orders index climbed to 50.9 from 43.6 while an employment index rose to 50.9 from 47.1, the first expansions in nine months for both measures.
While China’s exports plummeted in the first quarter from a year earlier, including a record 25.7 percent plunge in February, Commerce Minister Chen Deming said last month that the pace of the decline was slowing.
“Exports will drag on growth until at least the end of the year,” said Mark Williams, an economist at Capital Economics Ltd. in London.
The real-estate market is showing signs of stabilizing. Spending on real-estate development grew 4.1 percent in the first quarter, up from a 1 percent gain in the first two months. Still, property prices tumbled by a record in March and new construction by floor area fell 16.2 percent.
Goldman Sachs Group Inc. raised its estimate last month for China’s economic growth this year to 8.3 percent from 6 percent, citing “determined and persistent” government stimulus measures and a pickup in domestic demand.
The economy expanded 6.1 percent in the first quarter from a year earlier, lagging behind growth of 9 percent for all of 2008 and 13 percent for 2007. Growth may be 7 percent in the second quarter, the State Information Center said today in a report published in the China Securities Journal.
To contact the reporter on this story: Kevin Hamlin in Beijing at [email protected]
Last Updated: May 3, 2009 22:45 EDT
Share | Email | Print | A A A
By Kevin Hamlin
May 4 (Bloomberg) -- Chinese manufacturing expanded for the first time in nine months after investment surged and declines in export orders moderated, according to a survey by CLSA Asia- Pacific Markets.
The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 50.1 in April from 44.8 in March, the investment bank said today in an e-mailed statement. A reading above 50 indicates an expansion.
The rebound in manufacturing adds to signs of recovery in the world’s third-biggest economy as China grapples with a collapse in world trade and a slowdown in property investment and construction. In today’s figures, an output index climbed to 51.3 from 44.3, the first expansion in nine months, and the measure of export orders rose to 48.8 from 41.4.
“China’s government has been extremely successful in stimulating investment,” said Eric Fishwick, head of economic research at CLSA in Hong Kong. The “sharp improvement in export orders” was the other factor behind the rebound, he said.
The Shanghai Composite Index of stocks rose 2 percent as of 10:41 a.m. local time. The yuan traded at 6.8208 against the dollar, unchanged from before the data was released.
A government-backed manufacturing index, released May 1, also showed an expansion.
Signs that China’s economy is reviving because of the government’s 4 trillion yuan ($586 billion) stimulus package include a 30 percent increase in urban fixed-asset investment in March from a year earlier. Growth in industrial output accelerated in March and new loans more than tripled to a record 4.58 trillion yuan ($670 billion) in the first quarter.
Sparking a ‘Turnaround’
Caterpillar Inc., the world’s largest maker of bulldozers and earth-moving equipment, said April 22 that spending on infrastructure was sparking a “turnaround” in China. The government’s projects range from low-cost housing to a high- speed rail link between Shanghai and Nanjing.
The new-orders index climbed to 50.9 from 43.6 while an employment index rose to 50.9 from 47.1, the first expansions in nine months for both measures.
While China’s exports plummeted in the first quarter from a year earlier, including a record 25.7 percent plunge in February, Commerce Minister Chen Deming said last month that the pace of the decline was slowing.
“Exports will drag on growth until at least the end of the year,” said Mark Williams, an economist at Capital Economics Ltd. in London.
The real-estate market is showing signs of stabilizing. Spending on real-estate development grew 4.1 percent in the first quarter, up from a 1 percent gain in the first two months. Still, property prices tumbled by a record in March and new construction by floor area fell 16.2 percent.
Goldman Sachs Group Inc. raised its estimate last month for China’s economic growth this year to 8.3 percent from 6 percent, citing “determined and persistent” government stimulus measures and a pickup in domestic demand.
The economy expanded 6.1 percent in the first quarter from a year earlier, lagging behind growth of 9 percent for all of 2008 and 13 percent for 2007. Growth may be 7 percent in the second quarter, the State Information Center said today in a report published in the China Securities Journal.
To contact the reporter on this story: Kevin Hamlin in Beijing at [email protected]
Last Updated: May 3, 2009 22:45 EDT
