Seasonal Factors Lead to Contraction in China's Jan. Manufacturing PMI
China's manufacturing purchasing managers' index (PMI) reported a figure of 49.1 in January, reflecting a decrease of 1 point from December of the previous year, according to data released by the National Bureau of Statistics on Monday. A statistician from the NBS noted that the decrease in the index was affected by several factors, including the approaching Spring Festival holiday and the large-scale return of workers to their hometowns.
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On January, China's manufacturing purchasing managers' index (PMI) registered at 49.1, reflecting a decrease of 1 point from December of the previous year, indicating a contraction in factory activity, as reported by the National Bureau of Statistics on Monday.
A PMI figure above 50 signifies expansion, whereas a figure below indicates contraction.
Zhao Qinghe, a statistician with the NBS, noted that the drop in the index was influenced by factors such as the imminent Spring Festival holiday and the mass return of workers to their hometowns.
Interestingly, the expectation index for manufacturing activity climbed to 55.3, an increase of two points from the prior month. Zhao pointed out that this figure remains in a relatively high range, indicating that most manufacturing companies possess strong confidence in market development following the holiday.
Wen Tao, an expert from the China Federation of Logistics and Purchasing, stated that with the resumption of work and production across various regions after the Spring Festival and the introduction of a series of favorable policies along with the execution of tasks outlined at the last Central Economic Work Conference, the manufacturing sector is likely to experience steady improvement in the first quarter of this year.
Non-Manufacturing Sector Continues to Expand
In parallel, the PMI for the non-manufacturing sector persisted in the expansion zone, despite a decrease from 52.2 in December to 50.2 in January.
According to Wu Wei, an expert with the CFLP, the surge in consumption during the New Year holiday propelled growth in related sectors, including transportation, catering, and retail, during January. However, Wu pointed out that demand recovery in the non-manufacturing sector remains relatively weak. He emphasized the importance of accelerating investment and consumption-related policies to solidify the foundation for a stable and sustained recovery in this sector.
Industrial Sector Expected to Rebound
The latest data from the NBS also indicate that significant Chinese industrial enterprises reported profits exceeding 7.4 trillion yuan in 2024, a decline of 3.3 percent compared to the previous year.
Nonetheless, Yu Weining, a statistician from the NBS, mentioned that profits saw a consistent recovery in the fourth quarter, noting that the decline diminished significantly by 12.7 percentage points compared to the third quarter.
Yu attributed this improvement to the timely implementation of a series of incremental policies that have spurred a sustained recovery in industrial performance, even though profits for large industrial enterprises continued to decline overall in 2024. He stressed the need for efforts to broaden domestic demand and promote new quality productive forces in the subsequent steps to foster ongoing recovery in industrial performance.
Frederick R Cook contributed to this report for TROIB News
A PMI figure above 50 signifies expansion, whereas a figure below indicates contraction.
Zhao Qinghe, a statistician with the NBS, noted that the drop in the index was influenced by factors such as the imminent Spring Festival holiday and the mass return of workers to their hometowns.
Interestingly, the expectation index for manufacturing activity climbed to 55.3, an increase of two points from the prior month. Zhao pointed out that this figure remains in a relatively high range, indicating that most manufacturing companies possess strong confidence in market development following the holiday.
Wen Tao, an expert from the China Federation of Logistics and Purchasing, stated that with the resumption of work and production across various regions after the Spring Festival and the introduction of a series of favorable policies along with the execution of tasks outlined at the last Central Economic Work Conference, the manufacturing sector is likely to experience steady improvement in the first quarter of this year.
Non-Manufacturing Sector Continues to Expand
In parallel, the PMI for the non-manufacturing sector persisted in the expansion zone, despite a decrease from 52.2 in December to 50.2 in January.
According to Wu Wei, an expert with the CFLP, the surge in consumption during the New Year holiday propelled growth in related sectors, including transportation, catering, and retail, during January. However, Wu pointed out that demand recovery in the non-manufacturing sector remains relatively weak. He emphasized the importance of accelerating investment and consumption-related policies to solidify the foundation for a stable and sustained recovery in this sector.
Industrial Sector Expected to Rebound
The latest data from the NBS also indicate that significant Chinese industrial enterprises reported profits exceeding 7.4 trillion yuan in 2024, a decline of 3.3 percent compared to the previous year.
Nonetheless, Yu Weining, a statistician from the NBS, mentioned that profits saw a consistent recovery in the fourth quarter, noting that the decline diminished significantly by 12.7 percentage points compared to the third quarter.
Yu attributed this improvement to the timely implementation of a series of incremental policies that have spurred a sustained recovery in industrial performance, even though profits for large industrial enterprises continued to decline overall in 2024. He stressed the need for efforts to broaden domestic demand and promote new quality productive forces in the subsequent steps to foster ongoing recovery in industrial performance.
Frederick R Cook contributed to this report for TROIB News
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