BEIJING, Jan 2 (Reuters) - The Chinese manufacturing sector continued to deteriorate quickly in December, though the pace eased slightly from the month before, a survey by brokerage CLSA showed on Friday.
CLSA's Purchasing Managers' Index (PMI) rose to 41.2, up from the record low of 40.9 plumbed in November.
The output sub-index fell to 38.6, signalling the sharpest contraction in manufacturing production since the survey was launched in April 2004.
'Chinese manufacturing activity was very weak in December. Output contracted at a record pace, employment fell for the fifth month and work in hand declined,' Eric Fishwick, head of economic research at CLSA, said in a statement.
'With five back-to-back PMIs signalling contraction, the manufacturing sector, which accounts for 43 percent of the Chinese economy, is close to technical recession,' he said.
Factory output grew just 5.4 percent in the year to November, the slowest pace on record, according to official statistics, as overseas demand shrank in the face of the financial crisis and firms used up existing stocks of goods to cut costs.
The December PMI showed that new orders continued to shrink in December, the fifth straight month of contraction. New export orders declined at the second-sharpest pace in the history of the survey.
The PMI, compiled by research firm Markit Economics, is designed to give a timely snapshot of business conditions in the manufacturing sector.
Readings above 50 indicate improving conditions for manufacturers, while those below 50 indicate a deterioration in business conditions.
In December 2007, the PMI stood above that boom-bust line, at 53.3.
(Reporting by Jason Subler; Editing by Neil Fullick) Keywords: CHINA ECONOMY/CLSA (jason.subler@thomsonreuters.com; +8610 6627 1215; Reuters Messaging: jason.subler.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
CLSA's Purchasing Managers' Index (PMI) rose to 41.2, up from the record low of 40.9 plumbed in November.
The output sub-index fell to 38.6, signalling the sharpest contraction in manufacturing production since the survey was launched in April 2004.
'Chinese manufacturing activity was very weak in December. Output contracted at a record pace, employment fell for the fifth month and work in hand declined,' Eric Fishwick, head of economic research at CLSA, said in a statement.
'With five back-to-back PMIs signalling contraction, the manufacturing sector, which accounts for 43 percent of the Chinese economy, is close to technical recession,' he said.
Factory output grew just 5.4 percent in the year to November, the slowest pace on record, according to official statistics, as overseas demand shrank in the face of the financial crisis and firms used up existing stocks of goods to cut costs.
The December PMI showed that new orders continued to shrink in December, the fifth straight month of contraction. New export orders declined at the second-sharpest pace in the history of the survey.
The PMI, compiled by research firm Markit Economics, is designed to give a timely snapshot of business conditions in the manufacturing sector.
Readings above 50 indicate improving conditions for manufacturers, while those below 50 indicate a deterioration in business conditions.
In December 2007, the PMI stood above that boom-bust line, at 53.3.
(Reporting by Jason Subler; Editing by Neil Fullick) Keywords: CHINA ECONOMY/CLSA (jason.subler@thomsonreuters.com; +8610 6627 1215; Reuters Messaging: jason.subler.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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