China: PMIs surprised to the downside in November – UOB

UOB Group’s Economist Ho Woei Chen reviews the latest PMIs results in the Chinese economy.

Key Takeaways

“China’s official manufacturing and non-manufacturing PMIs slumped further in Nov amid a worsening COVID-19 outbreak and anti-lockdown protests. This is the second straight month that both PMIs are concurrently in contraction (defined as a reading <50).”

“Both PMI readings were below Bloomberg’s consensus expectation as they fell to their lowest since Apr which marked the start of a 2-month lockdown in Shanghai.”

“Due to the more challenging environment including rising recession risks in the developed economies, we have lowered our forecast for 4Q22 GDP to 3.9% y/y from earlier 4.5% y/y. For 2022 GDP, our forecast remains at 3.3%, after incorporating the stronger than expected 3Q22 data. We are also maintaining our 2023 GDP forecast for China at 4.8%.”