OPEC MOMR August 2017
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World Economy

OPEC Monthly Oil Market Report – August 2017

25

The acceleration in exports was the result of stronger demand in the United States and the European Union,

and the slower contraction of exports to Hong Kong. Also, improving manufacturing activity in developed

countries has been supportive of China’s export growth.

Graph 3 - 26: Chinese merchandise trade by selected countries, NSA

Profit growth in automotive manufacturing accelerated from 4% y-o-y in May to 19.6% in June, driven by

faster automotive sales growth and accounting issues. Meanwhile, owing to rising iron ore prices and the low

base effect over the same period in 2016, ferrous metals smelting and pressing profit grew 1.1 times y-o-y,

compared with the 5.7% expansion in May. The Caixin China General Manufacturing

PMI

rose 0.7 points to

51.1 in July from 50.4 in June, the highest reading in four months. The sub-indices of output and new orders

both rebounded further from May’s recent lows. The sub-indices of input costs and output prices both

continued to rise to hit four-month highs. Operating conditions in the manufacturing sector improved further

in July, suggesting the economy’s growth momentum will be sustained. The official non-manufacturing PMI

in China fell to 54.5 in July of 2017 from 54.9 in June. New orders (51.1 from 51.4 in the prior month)

increased at a slower pace, employment (49.5 from 49.6) declined for the seventh straight month while

business sentiment remained strong (61.1 from 61.1). In addition, new export orders grew for the first time

since February. The Caixin China Services PMI unexpectedly fell to 51.6 in June of 2017 from a four-month

high of 52.8 in May while markets expected 52.9. New orders rose the least in over a year and employment

grew at the slowest pace in 10 months although companies remained optimistic.

Industrial production

(IP) in China increased by 7.6% y-o-y in June of 2017, faster than a 6.5% rise in the

prior two months and beating market expectations of a 6.5% gain.

Graph 3 - 27: Chinese PMI

Graph 3 - 28: Chinese industrial production

-30

-20

-10

0

10

20

30

40

US exports US imports EU exports EU imports UK exports UK imports ASEAN

exports

ASEAN

imports

US$ bn

Jun 15 Jul 15

Aug 15 Sep 15 Oct 15

Nov 15 Dec 15 Jan 16 Feb 16

Mar 16 Apr 16

May 16 Jun 16 Jul 16

Aug 16 Sep 16 Oct 16

Nov 16

Dec 16 Jan 17 Feb 17 Mar 17 Apr 17

May 17 Jun 17

Sources: China Customs, Haver Analytics and OPEC Secretariat.

51.9

51.1

51.5

48

49

50

51

52

53

54

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Index

Sources: Caixin, IHS Markit and Haver Analytics.

Composite PMI

Manufacturing PMI

Services PMI

7.6

5.0

5.5

6.0

6.5

7.0

7.5

8.0

Jun 16

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

% change y-o-y

Sources: China National Bureau of Statistics and

Haver Analytics.