- The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 48.3 in January, compared to 49.7 in December. Analysts polled by Reuters had expected the Caixin PMI to be 49.5 last month.
- It was the second-consecutive month of contraction and the lowest reading since 2016.
A private survey on China’s manufacturing sector showed on Friday that factory activity contracted more-than-expected in January — confirming views that the world’s second-largest economy started the new year on soft footing.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 48.3 in January — the second-consecutive month of contraction and the lowest reading since 2016. January’s reading was also weaker than the 49.5 that analysts polled by Reuters expected, and the 49.7 reported in December.
A reading above 50 indicates expansion, while a reading below that level signals contraction.
The PMI is a survey of businesses about the operating environment. Such data offer a first glimpse into what’s happening in an economy, as they are usually among the first major economic indicators released each month. Investors have been closely watching economic indicators from the world’s second-largest economy for signs of trouble amid domestic headwinds and the ongoing U.S.-China trade dispute.
“Latest survey data signalled subdued overall operating conditions in the Chinese manufacturing sector at the start of 2019,” the statement by Caixin and IHS Markit said. “Softer demand conditions led companies to revise their production schedules … Underlying data indicated that weakness largely stemmed from muted domestic demand.”
The Caixin PMI data followed the release of China’s official manufacturing PMI on Thursday by the National Bureau of Statistics. The official data came in at 49.5 — higher than 49.3 expected by analysts in a Reuters poll and the 49.4 reported in the previous month.