The purchasing managers in China’s industrial companies are still not very optimistic. An important mark for growth seems to be a long way off. This could also have something to do with a holiday.
The mood in the executive suites of China’s manufacturing companies remained gloomy in January. According to official figures, the Purchasing Managers’ Index (PMI) for the sector reached 49.2 points, 0.2 percentage points higher than in the previous month, as the statistics office announced today in Beijing.
This means that the leading indicator, which is important for analysts and decision-makers, is still below the 50 point mark and signals a shrinking instead of growth in the business of the companies surveyed. Experts had expected a slightly higher score.
The outlook for industrial companies has been cloudy for some time. According to data from the statistics office, the PMI there last climbed to 50.2 points in September last year, just above the important growth mark. Since October, however, things have been steadily declining, reaching the December low of 49 points. Things went somewhat better for the non-manufacturing industry, which includes the service sector. According to the statisticians, the index improved from 50.4 to 50.7 points.
The world’s second largest economy has been weakening for months. Weak domestic consumption, a severe real estate crisis and poor foreign trade balances slowed the engine of the Chinese economy. Beijing has tried to boost growth in recent weeks, loosening requirements to make more money available to banks or lowering requirements for home purchases in big cities such as Beijing, Shanghai and Guangzhou. However, January is also considered a weak month for producers due to the Spring Festival, this year on February 10, and the following holiday week.
Source: Stern
