China’s factory, services bounced back amid ‘rapid rebound in economic activity’, but ‘not all smiles’
- China’s official manufacturing purchasing managers’ index (PMI) rose to 50.1 in January, while the non-manufacturing gauge rebounded to 54.4
- But profits at China’s industrial firms fell by 4 per cent in 2022 from a year earlier
China’s factory and services activity bounced back in January amid a “rapid rebound in economic activity” after Beijing dropped its zero-Covid policy, but “it is not all smiles across the board” due to concerns for small- and medium-sized producers and weak global demand, according to analysts.
The rebound was broad-based, as all five subindices increased, with the new order subindex rising to 50.9 in January from 43.9 last month, although the new export orders gauge rebounded only modestly to 46.1 from 44.2.
The official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, rose to 54.4 in January from 41.6 in December, reaching the highest mark since June, driven by a rebound in the services sector amid China’s rapid reopening.
With zero-Covid in the rear-view mirror, the recovery should remain robust in the near-term
“The official PMIs add to evidence of a rapid rebound in economic activity this month as disruption from the reopening wave faded. More shoppers returned to the streets, boosting services activity, while easing labour shortages supported industry. And with zero-Covid in the rear-view mirror, the recovery should remain robust in the near-term,” said Sheana Yue, China economist at Capital Economics.