China’s manufacturing sector experienced a slight dip in activity in January, with the Purchasing Managers’ Index (PMI) falling to 49.1 from December’s 50.1, according to data released by the National Bureau of Statistics (NBS) on Monday. A PMI reading below 50 indicates contraction, while a reading above 50 signals expansion.
The decline was largely attributed to seasonal factors such as the upcoming Spring Festival holiday, which sees many workers returning to their hometowns. Zhao Qinghe, a statistician with the NBS, noted that these factors temporarily slowed factory activity.
Despite the contraction, optimism among manufacturers remains high. The manufacturing activity expectation index climbed to 55.3, up two points from the previous month. “This reflects strong confidence among most manufacturing companies in post-holiday market development,” said Zhao.
Non-Manufacturing Sector Continues to Expand
Meanwhile, the PMI for the non-manufacturing sector remained in expansion territory, recording 50.2 in January, down from 52.2 in December. The slight slowdown was influenced by the seasonal holiday but was buoyed by a boom in consumption during the New Year holiday, boosting sectors like transportation, catering, and retail.
Wu Wei, an expert with the China Federation of Logistics and Purchasing (CFLP), pointed out that while demand recovery in the non-manufacturing sector is still relatively weak, accelerating investment and consumption-related policies is crucial to strengthening the foundation for a steady and sustained recovery.
Industrial Sector Expected to Rebound
In addition, the latest NBS data shows that major Chinese industrial enterprises posted profits of more than 7.4 trillion yuan ($1.02 trillion) in 2022, down 3.3 percent compared to the previous year. However, profits showed a steady recovery in the fourth quarter, with the decline narrowing significantly by 12.7 percentage points compared to the third quarter.
“The timely implementation of incremental policies has driven a sustained recovery in industrial performance,” said Yu Weining, a statistician from the NBS. “Efforts should be made to expand domestic demand and promote new high-quality productive forces to boost continued recovery in industrial performance.”
Reference(s):
China's Jan. manufacturing PMI contracts on seasonal factors
cgtn.com
