China: PMI signals contraction for the first time in over two years
February 2, 2015
The Purchasing Managers’ Index (PMI) fell from 50.1% in December to 49.8% in January, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP), which publish the index. As a result, the PMI now rests below the 50%-threshold that separates contraction from expansion in the manufacturing sector. January’s print marked the first below 50% reading in over two years and undershot the 50.2% that market analysts had expected.
January’s reading reflected deteriorations in almost all of the main subcategories. Both manufacturing output and new orders reached their lowest levels since February 2013. Conversely, the supplier delivery times category improved marginally in January. Meanwhile, input prices—a reliable leading indicator for consumer prices—hit a 21-month low, suggesting strong disinflationary forces.