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China’s January factory activity expanded at slowest pace in seven months
- Caixin/Markit manufacturing purchasing managers’ index (PMI) fell to 51.5 in January, the lowest level since June 2020
- Production and new orders both fall to lowest levels since last spring
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Chinese factory activity expanded at the slowest pace in seven months at the start of 2021, weighed down by falling export orders amid a surging pandemic and rising costs, a business survey showed on Monday.
The slowdown in the manufacturing sector underscores the fragility of the ongoing economic recovery in China, as Beijing grapples with a resurgence of local Covid-19 cases in northern China and navigates rising tensions with Washington and its allies.
The Caixin/Markit manufacturing purchasing managers’ index (PMI) dropped to 51.5 last month, the lowest level since June last year and easing markedly from December’s reading of 53.0. The 50-mark separates growth from contraction on a monthly basis. Analysts had expected a slight drop to 52.7.
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The survey broadly aligned with Beijing’s official PMI on Sunday, which showed the recovery in factory activity slowing as Covid-19 cases rose.
A sub-index for production in the Caixin/Markit PMI dropped to 52.5 in January, the slowest pace of expansion since April last year, while another sub-index for new orders fell to 52.2, the lowest since June.
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In particular, export orders plunged back into contraction in January, ending a five-month growth streak as the surging global pandemic suppressed foreign demand.
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