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Slow Growth in the Factory Sector Shows Signs that Economy Still not Getting any Traction

Slow Growth in the Factory Sector Shows Signs that Economy Still not Getting any TractionGrowth in the vast factory sector which stalled this November this is with output contracting for the very first time in six months, thus showing signs that the economy is still not gaining any traction still. The reports is part of the latest string of weak figures in recent weeks, that further strengthen the case for more stimulus  that avert to a sharper slowdown for the world’s second biggest economy.

Also hurt by the cooling property sector and erratic foreign demand plus a slack in domestic investment growth, the economy saw posting its weakest annual growth in 24 years at 7.4 percent. Furthermore the manufacturing purchasing managers index fell to a six month low of 50.0 from its final reading of 50.4 for October which well below the forecast of 50.3 by analysts. This was taken on a reading above 50 that indicates expansion which below 50 points to contraction that is done on a monthly basis.

Even with this a 7.1 percent growth is still being expected for the fourth quarter as the economy is still under downward pressures and is expected to have three rate cuts from now until the middle of next year.

To help reenergize the economy the government rolled out a steady stream of stimulus since April that placed a floor beneath flagging growth. Plus an ailing property market is showing signs of a possibility bottoming out even it remain weak until 2015.



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