Manufacturing activity declines in China as Lunar New Year holidays approach
Date
1/28/2025 4:30:42 AM
(MENAFN) Manufacturing activity in China slowed down in January for the first time in four months, as workers began leaving factories to travel to their hometowns for the Lunar New Year holidays. The National Bureau of Statistics reported that the purchasing managers index (PMI), based on a survey of factory managers, dropped to 49.1 in January from 50.1 the previous month. A PMI reading above 50 signifies expansion, while below 50 indicates contraction in business activity. The decline in manufacturing was also reflected in a drop in new orders and production.
In addition to the manufacturing slowdown, the PMI for the non-manufacturing sector, which includes construction and services, also decreased, falling to 50.2 from 52.2 in December. Zhao Qinghe, a senior statistician at the Bureau, attributed the dip in factory activity to the upcoming Lunar New Year holidays, which typically cause disruptions in production as millions of workers leave cities to reunite with their families for the celebrations. The public holidays this year will begin on Tuesday and last until February 4, often distorting economic data at the start of the year.
Despite the slowdown, China’s economy grew at a 5% annual rate in 2024, meeting the government's growth target. The growth was supported by strong exports and government stimulus measures. Analysts like Zichun Huang from Capital Economics remain optimistic, suggesting that activity is likely to rebound in the coming months, thanks to the government’s continued efforts to stimulate the economy.
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