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China’s factory activity expands in January as export orders rise, business confidence hits 9-month high
- China’s Caixin/S&P Global manufacturing purchasing managers’ index (PMI) remained unchanged at 50.8 in January
- The positive result contrasted with an official survey showing manufacturing activity contracted again last month due to persistently weak demand
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China’s factory activity expanded in January thanks to stable growth in output, quicker logistics and the first rise in new export orders since June, helping lift business confidence to a nine-month high, a private-sector survey showed on Thursday.
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The positive result, however, contrasted with an official survey released a day earlier which showed manufacturing activity contracted again last month due to persistently weak demand.
Taken together, they point to a still-underperforming economy in need of more policy support.
The Caixin/S&P Global manufacturing PMI stayed at 50.8 in January, unchanged from December and surpassing analysts’ forecasts of a fall to 50.6. The 50-point mark separates growth from contraction.
“Quicker logistics, increased procurement, and rising inventories reflected improved business confidence,” said Wang Zhe, senior economist at Caixin Insight Group.
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However, he noted that employment remained in contraction, price levels were subdued and “deflationary pressures persisted”.
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