The Nikkei Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, jumped to a four-month high of 51.1 in January after slumping to a 28-month low of 49.1 in December.
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The official Purchasing Managers’ Index (PMI) stood at 49.4 in January, compared with the previous month’s reading of 49.7 and below the 50-point mark that separates growth from contraction on a monthly basis. Markit’s overall PMI index, which includes the services and manufacturing sectors, rose marginally to 50.2 from 50.1 in December, worse than the 50.5 originally reported.
Markit’s latest survey of the sector showed a softening in new business growth as housebuilders experienced the second weakest rate of expansion in two-and-a-half years. Any figure below 50 denotes a contraction in the sector.
But the manufacturing PMI suggests that economic activity was low, Goldman Sachs said.
“In line with the subdued reading on the activity indicator, the employment index also fell”.
“Strong competition on the sales side combined with the ongoing weakness of global commodity prices meant that manufacturers saw selling prices and input costs fall further in January”, Mr Dobson added.
However, demand from overseas has seen a steep decline as the rate of reduction in new export orders accelerated in January.
The disappointing data at the start of 2016 came after China’s economy grew by 6.9 percent year on year in 2015, its lowest annual expansion in a quarter of a century. The survey, which looks more at smaller firms, showed a modest deterioration in the health of China’s manufacturing sector and recommended more be done to counteract the slide.
“Electricity production remained sluggish and crude steel output continued the weak trend in January, reflecting an ongoing deleveraging process in the industrial sectors”, Zhou Hao, an economist at Commerzbank told Reuters.
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BEIJING-A private gauge of China’s services activity expanded at a faster pace in January, indicating that a batch of government policy measures is supporting growth in some parts of the economy.
