China factory gauge records 2-year high

Bloomberg

China’s official factory gauge rose to the highest since July 2014, led by new orders, suggesting the economy’s stabilization continued into the fourth quarter as robust consumption underpins demand.
Manufacturing purchasing managers index rose to 51.2 in October, the National Bureau of Statistics said Tuesday, from 50.4 in the prior two months PMI beat all economist forecasts in a Bloomberg survey, with a median estimate of 50.3 Non-manufacturing PMI rose to 54 from 53.7 in September Separate PMI reading from Caixin Media and Markit Economics rose to 51.2, also beating estimates and climbing to a two-year high Numbers higher than 50 indicate improving conditions.
With the economy stabilizing this year and factory-gate prices rising for the first time since 2012, policy makers are acting to curb risks from soaring home prices, elevated corporate debt and shadow banking products. Fresh signs of strength may also keep the central bank on hold after keeping the main rate at a record low for a year. Still, manufacturers are being squeezed between rising wage and material costs and anemic global demand.
“China’s economy is heading into the fourth quarter with increased momentum” while the services reading suggests a continued robust pace of expansion in that sector, Fielding Chen and Tom Orlik, economists at Bloomberg Intelligence, wrote in a report. “Steady growth momentum and robust PMI data mean the government can continue to shift its focus toward controlling credit risks and curbing housing prices.”
“It’s a very strong reading,” Ding Shuang, head
of Greater China economic research at Standard Chartered and a former economist at the International Monetary Fund, said in a Bloomberg Television interview. “Both current and forward-looking economic indicators bode well for growth in the fourth quarter.”