Posted on 01 Feb 2023
China's Purchasing Managers' Index (PMI) for the manufacturing industry returned to the expansion territory in January after having hovered in the contraction zone for three consecutive months, the latest release by the country's National Bureau of Statistics (NBS) on January 31 showed. The official PMI reading climbed by 3.1 index points from last December to reach 50.1 this month.
China's economy made positive progress this month, as industrial and social activities restored gradually with the central government's relaxation of COVID-19 containment measures, commented Zhao Qinghe, a senior statistician at the NBS. And 18 of the 21 surveyed manufacturing sectors posted higher PMIs in January than the prior month, Zhao observed.
This month, both supply and demand for the manufacturing industry improved, with the key sub-index for production up by 5.2 points on month to 49.8, and that for new orders increasing by a larger 7 points on month to reach 50.9, NBS data showed.
The supply side presented a weaker recovery than demand due to the impact of the week-long Chinese New Year holiday ended on January 27, Zhao explained. Many manufacturers suspended their production and allowed workers to return to their hometowns for the holiday break, Mysteel Global noted.
The breakdown by the size of enterprises showed that Chinese firms of all sizes posted improved performance in January, with PMIs for large-sized companies rising the most by 4 points on month to 52.3. The indices for medium-sized and small-sized firms were still in contraction though, up by 2.2 points and 2.5 points on month to 48.6 and 47.2 respectively, according to the NBS statistics.
This month also saw brighter expectations among manufacturing firms regarding market recovery in the near term, Zhao said. The sentiment index scored 55.6, higher by 3.7 points from the level in December 2022.
Meanwhile, the PMI for China's non-manufacturing sector rose above the 50 threshold too after three months of contraction, surging by 12.8 points on month to 54.4. The sub-index of business activities in the service sector ended its downward trend in the prior six months and climbed to 54 in January.
As for the construction sector, the sub-index for business activities was 2 points higher on month to settle at 56.4 in January, indicating an accelerated improvement in the sector.
Source:Mysteel Global
