China flash manufacturing PMIs are at a 2-year high | FT Alphaville

China flash manufacturing PMIs are at a 2-year high

And the preliminary HSBC PMI figure for China this month is…wait for it…

… 51.9.

Now, that’s up from the final figure of 51.5 in December and also the highest number in 24 months. It’s also the fifth month of above-trend growth, but unlike the previous few months, the component table suggests it’s all expansionary across the board.

Backlogs of work are now growing; stocks of finished goods are falling, employment is rising faster and even export orders are now rising.

From HSBC:

We were surprised at the change in direction on export orders, but this chart shows the growth rate is only just breaking above the 50-mark:

China flash PMIs new orders and employment Jan 2013 HSBC

Backlogs of work are also a little fragile but employment, above, looks more solid.

Most strategists predicted growth momentum would rise or at least continue in Q1, and this flash PMI seems to indicate that the big jump in central infrastructure spending is having some flow-on effects through the economy.
Indeed, our post earlier this week on China’s imbalance, this Chinascope chart shows that the infrastructure spending boost was quite dramatic in the last few months of 2012:

FAI in 2012 central local private - ChinaScope

(Press release here.)

Related links:
China rebalancing posts – FT Alphaville
Lardy vs Pettis: Debating China’s future – WSJ China Realtime
Reading the China GDP growth entrails – FT Alphaville