China's manufacturing sector sees contraction this month
Date
1/27/2025 2:29:45 AM
(MENAFN) China's manufacturing sector experienced a contraction this month, as indicated by the latest survey conducted by the National Bureau of Statistics. The bureau announced on Monday that the sector's Purchasing Managers' Index (PMI) declined to 49.1 points in January. This result was below analysts' expectations, who had anticipated the index to remain steady at 50.1 points, the level recorded in the previous month. A PMI reading below 50 signifies a contraction in the economic activity of the sector, while a reading above 50 signals growth.
The decline in the manufacturing index reflects reduced activity within the sector, raising concerns about economic momentum as the year begins. Analysts were initially hopeful for stability but are now monitoring how external factors, such as global demand and domestic policy measures, might influence recovery. Meanwhile, the services sector, another key contributor to China's economy, also showed signs of deceleration in January.
Activity in the services sector grew at a slower pace during the month, with its PMI dropping to 50.2 points from 52.2 points in December. While the index remains above the threshold indicating growth, the decline highlights challenges faced by the sector amid changing market dynamics. The slower growth could potentially affect broader economic performance, given the sector's significant role in driving China's domestic consumption.
Combining data from both manufacturing and services, the composite PMI fell to 50.1 points in January, down from 52.2 points the month prior. Analysts had expected the composite index to drop, but only to 52.1 points, signaling a sharper-than-anticipated slowdown. This overall decline in economic activity raises questions about China's recovery trajectory, particularly as it contends with global economic uncertainties and domestic adjustments.
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