China’s economy suffers ‘soft start’ to 2024 despite manufacturing activity rebound

Official manufacturing purchasing managers’ index rose slightly in January, but the gauge remained in contraction for a fourth consecutive month

Beijing still needs to buttress its economic recovery at the start of the year even after last year’s higher-than-expected overall growth of 5.2 per cent

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Official manufacturing purchasing managers’ index stood at 49.2 in January, compared with a reading of 49 in December. Photo: EPA-EFE

Published: 9:36am, 31 Jan 2024Updated: 4:08pm, 31 Jan 2024

A tiny jump in China’s manufacturing activity in January still indicated “a soft start” to 2024 for the world’s second-largest economy, analysts said, weighing on Beijing’s efforts to regain growth momentum.

In line with market expectations, January’s official manufacturing purchasing managers’ index (PMI) rebounded slightly to 49.2, compared with a reading of 49 in December, data released by the National Bureau of Statistics on Wednesday showed, with a reading below 50 indicating contraction.

But the first set of data released in the new year revealed recurring challenges, including subdued demand and weak consumption, as the manufacturing PMI reading continued to languish in contraction for the fourth consecutive month.

Beijing is hoping to ensure a strong start to 2024 even after China’s economy grew by 5.2 per cent last year.

“The rise in the manufacturing index was mostly driven by a rise in the output component. The overall new orders component and export orders components rose too, but by less and they remain below 50, consistent with softening demand and a decline in exports,” analysts at Capital Economics said.

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