In October the official purchasing managers’ index for the manufacturing sector recorded an increase of 0.4 points on the previous month and, at 50.2 points, was back above the so-called expansion threshold of 50 points for the first time since July of this year. A look at the sub-components of the index is interesting: companies were much more upbeat about their production situation. The corresponding sub-index rose from 51.3 to 52.1 points. The assessment of new orders was also rosier. At 50.4 points, this was the most positive assessment since April..
With hard economic data, for instance on industrial production and retail sales, having already shown modest signs of improvement at the end of the third quarter, today’s news on sentiment in the Chinese economy provides further evidence that the world’s second largest economy is likely to see a return to stronger growth in the current quarter than in the preceding quarters. We are penciling in an increase of 8.1% on a year earlier. For 2012 as a whole we are expecting economic growth of 7.8%. In 2013 growth is likely to come in at 8.3%.