China’s smallest manufacturers haven’t had it this good in years

Indeed, as the chart shows, the manufacturing PMI a year ago, in December 2015, contracted even more, when it came in at 49.1.

Commenting on the research, Chief Economist with Investec Philip O’Sullivan said: “The headline Manufacturing PMI has been consistently above the 50 “no change” mark separating expansion from contraction for 43 months”.

Many analysts expect these rising costs to lead to higher prices for consumers this year, pushing up the rate of inflation.

“Contributing to the overall decline in manufacturing conditions was a fall in production”.

A shrinking manufacturing sector isn’t good news for Modi’s ambitious plans, including the flagship Make in India programme which seeks to turn India into a manufacturing powerhouse and create millions of jobs in the process.

India’s manufacturing PMI (purchase manager’s index) fell in December 2016 as demonetisation took its toll on the economy.

The unexpectedly strong United Kingdom manufacturing data has propelled the pound to a two-week high against the euro on the first trading session of the new year. In a surprise move last month, the European Central Bank (ECB) reduced the scale of its monetary supports but promised to keep stimulus going for longer.

In Germany, growth reached its highest in nearly three years in December, driven by rising demand from Asia and the US.

Improved domestic and overseas demand boosts output and new order growth.

Though December saw a decline in manufacturing output, the average figure for the third quarter was above the 50 level, the report said.

This suggests that the rebound in producer price inflation seen in the latter parts of 2016 is now starting to stoke downstream inflationary pressures, further eroding the likelihood of any additional near-term monetary or fiscal stimulus from policymakers in early 2017.

European shares eked out modest gains in early trade Tuesday, with United Kingdom stocks hitting a record high, as Chinese factory activity data pointed to stabilization in the economy and a gauge of United Kingdom manufacturing hit a 30-month high in December.