Expansion of China’s factory activities slowed in January amid repeated Covid-19 outbreaks and the seasonal disruption to production ahead of the Lunar New Year, data released on Sunday showed. The official manufacturing purchasing managers’ index (PMI) fell to 50.1 in January, from 50.3 in December, data from the National Bureau of Statistics showed. The figure was slightly above the median forecast of a Bloomberg survey of analysts, which had predicted a slight fall to 50.0. A reading above 50 indicates production expansion while a reading below indicates contraction. Within the official manufacturing PMI, a subindex for production in January fell to 50.9, down from 51.4 in December, while a subindex for new orders came in at 49.3, down from 49.7 in December. New export orders, meanwhile, rose to 48.4 compared with 48.1 a month earlier. Meanwhile, the official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, also fell to 51.1 in January from 52.7 in December. This was also slightly above the Bloomberg survey of analysts, which had predicted a fall to 51.0. Within the official non-manufacturing PMI, the construction subindex fell to 55.4 in January from 56.3 in December. Some industries have entered a traditionally low season in January. It, together with the slowing market demand, slowed the expansion of manufacturing activities Zhao Qinghe China’s official January composite PMI, which includes both manufacturing and services activity, fell to 51.0 from 52.2 in December. Zhao Qinghe, an official with the statistics bureau, largely attributed the lower PMI readings to seasonal factors and pandemic impact. “Some industries have entered a traditionally low season in January. It, together with the slowing market demand, slowed the expansion of manufacturing activities,” he said. “Construction activities are also affected by the cold weather and the upcoming Spring Festival.” The slower recovery of service sector was owing to the spread of coronavirus pandemic, which hit hard transport and contact-intensive sectors like hospitality and household service, Zhao said. ‘I dare not order’: China’s 150 million online shoppers fear virus threat Meanwhile, the Caixin/Markit manufacturing PMI fell to 49.1 in January from 50.9 in December , which was the highest reading since June. The figure was below the median forecast of a Bloomberg survey of analysts, which had predicted a fall to 50.0. The Caixin/Markit PMI focuses on small, private firms unlike the official index whose respondents come mostly from larger, state-owned firms. China has warned of strong headwinds in its economy this year, including weakening expectations, contracting demand and supply shocks. It has vowed to take action to stop the economy from a further slide, prioritising economic and social stability ahead of a key Communist Party gathering this year. “Industrial activity slowed due to weak domestic demand,” Pinpoint Asset Management chief economist Zhang Zhiwei said. “The weak PMI indicates the government’s policy easing measures have not yet been passed to the real economy. “We expect the government will step up policy supports in coming months, particularly through more fiscal spending.”