Analysts had forecast it would dip to 49.9 from 50.0 the previous month.China is expected to roll out more economic support measures in coming months on top of a raft of initiatives this year. A prolonged downturn in the factory sector, key for jobs, would likely spark further steps to juice domestic demand.In November, industrial output rose the least in nearly three years, while earnings growth at industrial firms fell for the first time in nearly three years.A PMI sub-index on overall factory output prices fell to 43.3 in December from 46.4, pointing to continued pressure on corporate earnings. A gauge on overall production fell to 50.8, the lowest since February, from 51.9.New orders - an indicator of future activity - continued to soften, reinforcing views that business conditions in China will likely get worse before they get better.A sub-index for total new orders contracted for the first time in at least a year, falling to 49.7 amid persistently weak demand at home and abroad.New export orders shrank for a seventh straight month, with the sub-index falling to 46.6 from 47.0.China’s auto sector has been particularly hard hit. Sales in the world’s biggest auto market are on track to fall for the first time since at least 1990.“Last December we saw overall China carmakers’ capacity utilisation rate at around 56 percent, but now we estimate it is roughly 50 percent,” Shanghai-based senior analyst Alan Kang at LMC Automotive told Reuters. The official non-manufacturing PMI rose to 53.8 from 53.4.While that offers some cushion - services account for over half of China’s economy - consumers remain cautious.Beijing says China is still on track to hit its growth target of around 6.5 percent, down from 6.9 percent in 2017, but the economy is expected to lose a few more steps next year.The World Bank predicts growth will slow to 6.2 percent in 2019, still robust by global standards but the weakest expansion in nearly 30 years.- Reuters

Source: The Star December 31, 2018 05:37 UTC