China economy ‘losing momentum’ as first major data of 2019 paints gloomy picture
- Chinese manufacturing contracted in January, for the second month in a row, purchasing managers’ index (PMI) data showed
- The downward pressure on the Chinese economy is still significant, according to Li Chao, an analyst with Huatai Securities
China’s first major economic announcement of 2019 showed a slight rebound in manufacturing and a stronger-than-expected services sector, but analysts said there were clear signs of pressure on the Chinese economy in January.
The monthly purchasing managers’ index (PMI) is among the few indicators available to check the health of the Chinese economy at the beginning of each year.
The National Bureau of Statistics (NBS) does not release other economic data for January and February, such as industrial added value, retail sales, and fixed asset investment, until early-March, to avoid any distortion due to the Lunar New Year holiday.
The PMI saw a slight improvement in January, from 49.4 in December to 49.5, but this could not keep the manufacturing sector for contracting for a second successive time with a reading below 50 indicating shrinkage.
There is some room for optimism in the over-performance of the service sector, with non-manufacturing PMI growing from 53.8 to 54.7.
But analysts have, on the whole, greeted the data negatively.