An independent survey of China’s manufacturing sector showed that factory activity continued to weaken last month, providing yet more evidence of a prolonged economic slowdown gripping the world’s second-largest economy.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 48.3 in January, from 49.7 the month before. The market consensus before the data release was 49.5, where 50 indicates the boundary between expansion and contraction.
The Caixin survey is considered a reliable first glimpse into China’s manufacturing sector, placing a stronger focus on small- and medium-sized enterprises than the official data. The official headline reading, released by the National Bureau of Statistics, edged higher to 49.5 in January.
The data breakdown suggests that the decline was driven mainly by softer domestic demand for manufactured goods, with other metrics such as business confidence and foreign orders surprisingly improving for the month.