Factory output speeds up again
February 2, 2005
Mainland manufacturing activity in January rose at the fastest pace in three months as companies expanded output to meet rising domestic and export demand, a survey of purchasing managers showed.
The CLSA China Manufacturing PMI rose to 52.1 from 51.3 in December, according to CLSA Asia-Pacific Markets, which compiles the report based on figures collected by pollster NTC Research.
That is the highest since October, when the index was 52.4.
A reading above 50 indicates an improvement in business conditions. The survey ``signals a further improvement of manufacturing business,'' CLSA said.
The report's findings were based on the results of a questionnaire sent to purchasing managers at more than 350 industrial companies in China.
About a third of companies reported an increase in production from a month earlier.
Declines in output by about a fifth of companies surveyed stemmed partly from shortages of ``inputs'' such as raw materials and electricity.
Growth of new orders in January accelerated to the fastest pace for four months, and new export orders rose for a 10th straight month.
Manufacturers are finding it hard to keep up with demand, with more than a third reporting an increase in backlog of work, the survey said.
The backlog and strong sales led to an eighth straight month of decline in inventories of finished goods.
Prices of oil, steel and coal continued to climb in January, though the pace of input price inflation slowed for a fourth month to the weakest level since May. Slower inflation contributed to the first decline in average manufacturing output prices since the survey started last April.
Separately, the mainland is set to remain a net importer of steel for years to come despite the rapid expansion of its steel industry, experts and state press said Tuesday.
China imported 29.3 million metric tons of steel products in 2004, down 7.87 million tons year on year.
[here is some proof for soft landing<g>]
The country is still the world's biggest importer, the China Iron and Steel Association said.
However, its steel product exports leapt 6.06 million tons to 14.23 million tons in 2004.
``The tumble in our steel imports and the sharp growth in exports mainly resulted from higher international steel prices than in the domestic market,'' the China Daily quoted association vice-chairman Luo Bingsheng as saying.
According to the International Iron and Steel Institute, China produced 272.5 million tons of steel in 2004, mostly for domestic use in the building of major infrastructure projects.
BLOOMBERG, AGENCE FRANCE-PRESSE
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