Manufacturing in China at 18-month high

Bloomberg
Posted: Monday, Nov 02, 2009 at 2034 hrs IST
Updated: Monday, Nov 02, 2009 at 2034 hrs IST

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: China’s manufacturing expanded at the fastest pace in 18 months and a government researcher said economic growth will accelerate this quarter.

The Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 55.2 in October from 54.3 in September, the Federation of Logistics and Purchasing said on Sunday in an e-mailed statement in Beijing. An index of export orders climbed to 54.5 from 53.3.

Premier Wen Jiabao’s $586 billion stimulus plan and unprecedented growth in new loans are sustaining China’s rebound amid signs that exports may start to recover as the global slump eases. The world’s third-biggest economy may expand at a 9.5% annual pace this quarter, Zhang Liqun, of the State Council Development and Research Centre, said in the statement. “China’s recovery has been impressive, but has been heavily reliant on government-directed investment,” said Brian Jackson, Hong Kong-based strategist for emerging markets at Royal Bank of Canada. “External demand will provide an additional source of support for growth in the months ahead,” he said, adding that the government may “start tightening policy from early 2010.” The latest PMI number was higher than the median estimate of 54.7 in a Bloomberg News survey of 10 economists.

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