Manufacturing and services slow in China and India

China and India recorded a slowdown in manufacturing and service indices towards the end of 2010, according to Markit.

India’s HSBC India Composite Purchasing Managers’ index was 58.9 in December, down from 61.3 in November.

New business growth was the lowest in five months due to slower increases in new orders

China recorded a three-month low in its private sector growth, although its overall numbers for the fourth quarter were its best since the first.

Manufacturing output growth for China continued to exceed output growth in the service sector.

New business growth was the lowest in five months due to slower increases in new orders in the manufacturing sector and the weakest rate of expansion in new work received by service providers since February 2009. (article continues below)

Following a recent tightening in monetary policy, Chinese input price inflation eased since November, but remained faster than the long series average. The survey reveals that the overall cost inflation remained substantial as well.

In India, while new business increased strongly in December, expansion also slowed compared to the rate in November. India recorded a rise in its input costs, but equally output prices rose above the long-run series average, suggesting Indian companies have not struggled to pass on higher costs.

Despite the overall slowdown, both countries have recorded an increase in employment growth. China has experienced the strongest growth in six months, while India saw staffing levels increase for a third consecutive month.