The Official NBS Manufacturing PMI in China fell unexpectedly to 50.0 in November of 2018 from 50.2 in the previous month and missing market consensus of 50.2. It was the lowest reading since a contraction in July 2016, as output rose the least in nine months (51.9 vs 52.0 in October), new order growth slowed further (50.4 vs 50.8), and new export orders shrank for the sixth straight month (47.0 vs 46.9). In addition, buying activity rose less (50.8 vs 51.0), reaching the lowest reading since February. Meantime, employment (48.3 vs 48.1) and orders in hand (44.3 vs 44.3) continued to contract. On the price front, input prices increased much softer (50.8 vs 58) while output charge declined for the first time in eight months (46.4 vs 52). Meantime, sentiment weakened markedly (54.2 vs 56.4). Business Confidence in China averaged 51.93 Index Points from 2005 until 2018, reaching an all time high of 59.20 Index Points in April of 2008 and a record low of 38.80 Index Points in November of 2008.
Business Confidence in China is expected to be 50.40 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Business Confidence in China to stand at 51.30 in 12 months time. In the long-term, the China NBS Manufacturing PMI is projected to trend around 51.00 Index Points in 2020, according to our econometric models.