China manufacturing outlook worsened in January, even before coronavirus outbreak
- The Caixin manufacturing purchasing managers’ index (PMI), a survey of small, private producers in China, was 51.1 in January, down from 51.5 in December
- China’s industrial profits – the money made by its largest industrial firms – also fell by 3.3 per cent in the whole of 2019 after falling 6.3 per cent in December
The outlook for China’s small manufacturers worsened in January, ahead of what is expected to be a prolonged economic chill amid the fallout from the coronavirus outbreak.
The Caixin manufacturing purchasing managers’ index (PMI), a survey of small, private producers in China was 51.1 in January, with anything above 50 indicating growth, according to a data release on Monday.
This was a five-month low and was down from 51.5 in December and below the expectations of analysts, which had forecast 51.3.
“While the Caixin manufacturing PMI edged down last month, the survey was conducted too early to tell us much about the extent of the economic damage from the Coronavirus outbreak,” said Julian Evans-Pritchard, senior China economist at Capital Economics.
“The future output component actually rose, which suggests that most survey participants were unaware of the coming coronavirus disruptions when they submitted their responses. The Caixin survey closed on 24th January, only four days after Xi Jinping spoke publicly about the outbreak for the first time. And the vast majority of survey responses are likely have been submitted before there was widespread public awareness of the scale of the pandemic.
“The upshot is that the PMI will only fully reflect the impact of the outbreak next month. We think it will drop sharply, most likely below 48.”