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World Economy

28

OPEC Monthly Oil Market Report – October 2017

The

Caixin Manufacturing PMI

in China fell to 51.0 in September from 51.6 in the previous month and

missing market consensus of 51.5. It was the weakest expansion of the manufacturing sector since June, as

both output and new orders rose the least in three months while growth in export sales slowed. At the same

time, inflationary pressures picked up, with output prices and input costs hitting their highest level seen this

year.

The

official Non-Manufacturing PMI

in China rose to 55.4 in September 2017 from 53.4 in the preceding

month. It was the strongest growth in services activity since May 2014, as new orders growth accelerated

significantly (reaching 52.3 from 50.9 in August) and business sentiment strengthened markedly (rising to

61.7 from 61.0). At the same time, new export orders and employment both improved from a month earlier,

respectively rising to 49.7 from 49.0 and increasing to 49.7 from 49.5, but remaining in contraction territory.

The

Caixin

Services PMI

rose to 52.7 in August 2017 from 51.5 in July and beating the market consensus

of 51.8. It was the fastest rise in services activity since May, as new orders increased solidly, employment

went up the most in four months and business confidence strengthened. At the same time, the backlog

accumulation rose the least in four months.

Graph 3 - 30: Chinese PMIs

Graph 3 - 31: Chinese industrial production

China's industrial production

increased 6.0% y-o-y in August, down from the 6.4% increase in the

previous month. It was the weakest gain in industrial production since December, as output increased at a

slower pace for electricity, gas and water production, and fell further for mining. In the meantime,

manufacturing output grew further (6.9% from 6.7% in July).

52.4

51.0

52.7

48

49

50

51

52

53

54

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

Index

Sources: Caixin, IHS Markit and Haver Analytics.

Composite PMI

Manufacturing PMI

Services PMI

6.0

5.0

5.5

6.0

6.5

7.0

7.5

8.0

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

% change y-o-y

Sources: China National Bureau of Statistics and

Haver Analytics.