China's manufacturers enjoyed a modest return to growth in November, ending a run of 12 months of contraction. According to HSBC's Purchasing Managers' Index the industry recorded a figure of 50.5 for November, up on October's 49.5 and marginally higher than the 50.4 reported for the Flash PMI on 22 November.
As the number 50 signifies the difference between an industry shrinking or growing, the latest PMI suggests manufacturers are finally enjoying an upturn in conditions. The last time the index was above 50 was in October 2011.
The PMI is compiled using the views of senior purchasing executives in more than 420 manufacturing companies and is seen as a key indicator to the health of the industry.
A breakdown of the components that make up the PMI reveals a number of reasons for optimism. The level of new export orders swung up sharply from 46.7 to 52.1 - thanks to increased levels of demand from traditional markets such as Europe and the US.
Employment levels at manufacturers continue to fall, but the rate of job shedding is lower than previous months, and stocks of finished goods are being depleted thanks to rising orders.
HSBC's Chief Economist for Greater China, Qu Hongbin, believes the figures suggest China's economy is recovering after recent headwinds.
"This confirms the Chinese economy continues to recover gradually. We expect GDP growth to rebound modestly to around 8 percent in the fourth quarter as the easing measures continue to filter through."