An official gauge of China’s manufacturing output slipped for a second month in January, while activity in the services sector slowed to its lowest reading since March.
- According to data released by the National Bureau of Statistics, the official manufacturing purchasing managers’ index fell to 51.3 from 51.9 in December.
- The non-manufacturing gauge declined from 55.7 in January to 52.4. This was the biggest drop since February last year, when China discontinued Kovid-19. Readings above 50 indicate an expansion in output from the previous month.
- China’s recovery from the epidemic gained momentum in late 2020 by a surge in exports for medical and electronic goods.
- Economists expect some weakness in the PMI before the Lunar New Year holiday in February. In addition to the seasonal decline in production, strict travel restrictions and virus control measures following recent Kovid-19 outbreaks in China mean many workers will not make the annual trip back home, resulting in weak spending on gifts and food Will be likely
- Economists at Nomura Holdings Inc. wrote in a report before the data was released, “These measures will hamper recovery in the services sector, especially the hospitality industry.” However, they may “give a slight boost to industrial production and construction in South China, as workers will remain at the workplace.”
- Overall, new control measures will drag on economic growth in the first quarter, he wrote.
- A sub-index of new export orders for factories fell to 50.2, while one for new orders was lower at 52.3
- A sub-index of manufacturing employment fell to 48.4, while non-manufacturing employment slowed to 47.8
– Assisted by James Mayer and Lin Zhu
()Updates with charts, economist commentary and more details throughout.)