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World Economy

OPEC Monthly Oil Market Report – November 2017

25

Graph 3 - 29: China’s industrial production

Graph 3 - 30: China’s PMIs

The seasonally-adjusted

manufacturing

PMI

a composite indicator designed to provide a single-figure

snapshot of operating conditions in the manufacturing economy – was unchanged from a month earlier at

51.0 in October showing a further marginal improvement in the health of the sector. Operating conditions

have now strengthened in each of the past five months. Manufacturing companies in China reported a further

increase in new business during October, a slight improvement since September, but remained moderate

overall. New export sales rose at a similarly modest pace, following a marginal upturn in September. In

contrast, production increased only slightly in October. Moreover, the rate of growth was the weakest seen

for four months. At the same time, confidence towards the 12-month outlook for production moderated to its

second-lowest level since August 2016. Chinese manufacturing employment fell again in October, thereby

extending the current sequence of job shedding to four years.

China’s

Caixin services PMI

rose to 51.2 in October from 50.6 a month earlier. Business confidence

improved slightly while new order growth was modest and job creation remained marginal.

China’s

GDP growth

expectation was revised up to 6.8% from 6.7% for 2017 and was also revised up to

6.5% from 6.3% for 2018. China’s government is reportedly looking to generate GDP growth with best

quality, efficiency, and dynamism”. These comments came after the conclusion of the Communist Party

congress that granted the country’s president a level of authority unmatched in recent decades. In recent

years, China’s leaders have returned to strategies fuelled by debt and state investment to keep growth

stable. China’s target for GDP growth this year is around 6.5%.

OPEC Member Countries

Inflation in

Saudi Arabia

posted -0.1% in September, from -0.2% y-o-y in August, maintaining its notable

easing since the beginning of the year due to the base-line effect, which could be a supporting factor to

private consumption. The non-oil private sector continued growing at strong pace in October. The Emirates

NBD Saudi Arabia PMI of October registered 55.6 in October, from 55.5 a month earlier, suggesting

continued solid improvement in the business conditions of the non-oil private sector. The survey showed a

sharp rise in both new orders and output. Strong domestic demand contributed to the strong new orders,

while new export orders went up for the third consecutive month. Employment also continued to rise in

October, extending the current streak of job creation growth to 43 months. Furthermore, confidence

regarding future growth reached a five-month high due to better expectations for economic conditions and

business investments. In 3Q17, the index was largely stable at an average of nearly 55.7. In 1H17, the index

averaged at 56.0, highlighting a higher rate of growth compared with the first six months of 2016.

6.6

5.0

5.5

6.0

6.5

7.0

7.5

8.0

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

% change y-o-y

Sources: China National Bureau of Statistics and

Haver Analytics.

51.0

51.0

51.2

48

49

50

51

52

53

54

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

Oct 17

Index

Sources: Caixin, IHS Markit and Haver Analytics.

Composite PMI

Manufacturing PMI

Services PMI