China’s factory activity shrank for the third straight month in December and at the sharpest pace in nearly three years as COVID infections swept through production lines after Beijing’s abrupt easing of antivirus measures, reports Nikkei Asia. The official purchasing managers’ index (PMI) stood at 47.0 against a 48.0 reading in November, the National Bureau of Statistics (NBS) said on Saturday. Economists in a Reuters poll had expected the PMI to come in at 48.0. The 50-point mark separates contraction from growth on a monthly basis.
The drop was the biggest since the early days of the pandemic in February 2020.
The data offered the first official snapshot of the manufacturing sector after China removed the world’s strictest COVID restrictions in early December. Analysts said surging infections could cause temporary labor shortages and increased supply chain disruptions, weighing further on economic activity in the coming months.