China November PMI improves economic outlook

Chinese manufacturing continued to pick up in November on the back of increasing output, new orders, and purchase of inputs, according to official data released over the weekend by the China Federation of Logistics and Purchasing (CFLP).

The manufacturing purchasing managers' index (PMI) for November registered an increase for the third straight month by moving up to 50.6 from 50.2 in October. The PMI for September was 49.8, and for August it was 49.2.

Before August, the PMI had declined four months in a row.

A PMI above 50 represents overall expansion in activities, while a value below 50 indicates overall contraction.

The CFLP manufacturing PMI is worked out jointly by the CFLP and China's National Bureau of Statistics (NBS) which is working directly under the state council of China. It provides each month an early indication of economic activities in the Chinese manufacturing sector.

The PMI is a composite index derived from five other indicators with varying weights; new orders 30 per cent, output 25 per cent, employment 20 per cent, supplier's delivery items 15 per cent and stocks of major inputs 10 per cent. It is based on a survey of 820 companies and 20 industries.