China economy endures bad start to 2019 as private data highlights weakening manufacturing sector
- Caixin Purchasing Managers’ Index dropped 0.6 points to 49.4 in December, contracting for the first time since May 2017
- Follows release of official figures compiled by the National Bureau of Statistics, which dropped 0.6 to 49.4 last month, its first contraction since July 2016
China’s slim hopes of an economic upturn in 2019 suffered a blow on the first working day of the new year as a privately compiled economic gauge showed signs of weakening manufacturing activities.
The Caixin Purchasing Managers’ Index (PMI), which tracks the activities of small and medium-sized enterprises, dipped below 50.0 for the first time since May 2017 as December’s reading fell 0.5 points to 49.7.
A drop below 50.0 indicates contraction compared to expansion.
The PMI is usually an advance indicator of China’s industrial production, trade activities, employment and business confidence.
Serena Zhou, an economist at Mizuho Securities in Hong Kong, said that the lower than expected results suggested further weakness in the future and that “the worst is yet to come”.