China’s factory activity growth slowed in January, with the Caixin/S&P Global manufacturing PMI falling to 50.1 from 50.5 in December, according to a private-sector business survey. This marks a four-month low and missed analysts’ forecasts. However, the reading still indicates growth.
The smaller Caixin survey showed an acceleration in manufacturing production and a significant increase in new orders since November. Factory owners reported improved demand, with some clients increasing orders for stockpiling purposes ahead of potential new tariffs from US President Donald Trump.
However, export orders declined for a second month, and factories reduced their average selling prices at the fastest pace since July 2023, reflecting increased competition and global uncertainties. Despite this, manufacturers’ sentiment improved due to signs of improving domestic demand and expected government support measures.
The job shedding rate in January accelerated to its fastest speed since February 2020, but manufacturers attributed it to cost concerns rather than layoffs. The sector still experienced a fourth consecutive month of backlogged work, leading economist Wang Zhe at Caixin Insight Group to warn that rising uncertainty could worsen China’s export environment and pose significant challenges for the economy.
The government must be prepared to adjust economic policies promptly to adapt to evolving circumstances, according to Wang Zhe.
Source: https://www.reuters.com/markets/asia/china-factory-activity-growth-slows-january-caixin-pmi-shows-2025-02-03