Global hopes after China's manufacturers score hat-trick
THE growth prospects for the global economy were given a fillip over the New Year after China's manufacturing sector posted a third consecutive month of expansion.
The official purchasing managers' index (PMI) of the world's most populous country was 50.6 in December, which matched November's seven-month high and reflects increased spending on infrastructure projects and growth in sectors, such as car manufacturing and electronics.
A PMI figure above 50 indicates expansion for the massive factory base in China and will be welcomed by governments in the US, UK, Eurozone and Japan, which are either mired in recession or finding sustained growth elusive.
The previously breakneck economic growth in China, the world's second-biggest economy, had slowed for seven consecutive quarters to 7.4 per cent between July and September last year but this and another survey this week point to an acceleration in the final quarter to a forecast 7.8 per cent.
The bank HSBC's survey, which focuses more on smaller businesses, revealed a PMI of 51.5 for China in December - the highest since May 2011.
In a research note, Lu Ting, the chief Greater China economist at Bank of America, said: "Most data, especially the industrial earnings, have been pointing to an impressive recovery."
However, China's National Bureau of Statistics struck a cautious tone. It said: "Output has stayed above the 50-mark, showing that the manufacturing industry appears to maintain growth expectations but the rate of growth has weakened."
Even if China delivered estimated economic growth of 7.7 per cent in 2012, this would still mark its weakest output for 11 years.