China: Manufacturing and non-manufacturing PMIs improve in January
The National Bureau of Statistics’ Manufacturing Purchasing Managers’ Index (PMI) rose to 49.2 in January from December’s 49.0, matching market expectations. Consequently, the index remained below the 50.0 no-change threshold, signaling a continued deterioration in manufacturing sector operating conditions from the previous month. The headline print reflected improvements in the readings for output and new orders.
The National Bureau of Statistics’ non-Manufacturing PMI came in at 50.7 in January, up from December’s 50.4 and slightly above market expectations. This was the result of strong services activity more than offsetting a slowdown in construction. Services activity likely benefited from New Year’s holiday spending, while construction slowed as the boost from Q4’s extra government bond issuance faded.
On the data, Nomura analysts said:
“The January PMIs point to a lackluster picture of a continued manufacturing contraction, roughly flat services and slowing construction, which is largely consistent with our view from mid-October of another economic dip, following a brief stabilization in August-September last year.”