PRINT THIS PAGE China PMI report on manufacturing04/10/2006. Source: CLSA Asia-Pacific Markets.
The China PMI report on manufacturing finds modest month-on-month increases in output and new orders, while input prices rise for first time in four months. Commenting on the survey, Eric Fishwick, Deputy Chief Economist at CLSA said, "Conditions among Chinese manufacturers are improving, albeit at a gradual pace. However longer term negatives still exist and there is little reason to expect conditions to return to their bullish 2004 levels. Output and new orders have increased with orders from overseas predictably remaining strongest. However, our principal worry remains profitability. Raw materials prices are pushing costs upward while output prices continue to fall, catching profits in a pincer movement. Against this background we expect banks’ lending attitudes to continue to harden and for private investment, which has already slowed over 2005, to decelerate further. The need to try and ameliorate rather than contribute to these pressures means that market expectations for a revaluation of the renminbi will continue to be disappointed."
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CLSA is an award-winning brokerage, investment banking and private equity group in the Asia-Pacific Markets. Founded in 1986 and headquartered in Hong Kong, CLSA is a unit of France’s Credit Agricole, ranked 2nd largest bank in the World (based on Tier One capital) and the 4th largest based on total assets.
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