Manufacturing activity likely to fall in November, says HSBC

The Purchasing Managers' Index will probably dip to 50.4 in November from the seven-month high of 50.9 in October, HSBC said on Thursday, citing a preliminary reading one week before the final PMI data.

The figure was above 50 for a fourth consecutive month.

A reading above 50 indicates manufacturing expansion, beneath indicates contraction.

Overall new orders continued to increase in November but at a slower rate, while new export orders fell from a rise in October, showing weaker overseas demand, HSBC said.

The PMI sub-index that indicates restocking activities also registered a slowing pace, which suggested a weaker willingness among entrepreneurs to increase production.

Qu Hongbin, chief economist for China at HSBC, said that even with the manufacturing sector's growth momentum sagging, it is still the second-highest PMI reading in seven months.

"The muted inflationary pressures should enable Beijing to keep policy relatively accommodative to support growth," he said.