China’s manufacturing shrank again in January, as fears of further economic slowdown mount
- Official purchasing managers’ index (PMI) rose to 49.5 from 49.4 in December as factory activity in China contracted for a second consecutive month
- Non-manufacturing PMI rose to 54.7 from 53.8 in January, well above analysts’ expectations of 53.8, according to Bloomberg poll
Factory activity in China contracted for a second consecutive month in January, as the trade war with the United States and a domestic slowdown continue to weigh on the world’s second largest economy.
The official purchasing managers’ index (PMI) rose to 49.5 this month from 49.4 in December. This was higher than the expectations of a group of analysts polled by Bloomberg, which had predicted that it would dip slightly to 49.38.
However, anything below 50 represents a contraction, meaning that for the second month in a row, one of the main engines of Chinese growth has acted as a drag on the economy.
The PMI is an indicator of economic health for manufacturing and service sectors. It provides information about current business conditions to company decision makers, analysts and purchasing managers.
However, other sectors of the economy showed some signs of improvement.