Bloomberg News

China HSBC PMI Slump May Have Been ‘Exaggerated’: Credit Suisse

November 24, 2011

Nov. 24 (Bloomberg) -- A decline in a preliminary China purchasing managers’ index yesterday may have been “exaggerated” by “negative sentiment” from falling property prices, Credit Suisse Group AG said.

The reading of 48 reported by HSBC Holdings Plc and Markit Economics yesterday compared with a final number of 51 last month. A number below 50 indicates a contraction.

“Although the weakness fit with our expectation that Chinese demand has weakened since September, we think the extent of the fall could have been exaggerated,” Dong Tao and Christiaan Tuntono, analysts at Credit Suisse, wrote in a report dated today. The PMI has been “quite volatile” in recent monthsm, they wrote.

There’s a “chance” the official PMI for November would weaken further from 50.4, “but we do not think the drop would be as drastic,” they wrote. The brokerage expects the economy to slow without collapsing as the cash flow situation at small and medium enterprises improves.

To contact the editor responsible for this story: Richard Frost at

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