Business & Economy

China’s manufacturing continues growth but at slower pace

Shanghai, China, Dec 31 (efe-epa).- The manufacturing sector in China has expanded in December, albeit at a slower pace than the last month.

The official manufacturing Purchasing Manager’s Index (PMI) slid to 51.9 in December from 52.1 recorded in November, according to the data from the National Bureau of Statistics (NBS) published on Thursday.

A reading of more than the 50-point threshold in the official gauge of activity indicates growth, while a number below 50 signals contraction.

The data beats the expectations of analysts, who had predicted a manufacturing PMI of 52 points in the last month of 2020.

However, the data shows that the sector continues on its recovery path.

It has logged expansion for 10 months in a row after the indicator plummeted to 35.7 points in February due to a halt in economic activity after the Covid-19 outbreak.

The February contraction in manufacturing was even worse than the 38.8 points recorded in November 2008, when the world struggled due to the global economic crisis.

In a breakdown by size, the large firms’ indicator fell 0.3 percentage points from the reading in November, standing at 52.7 in the last month of the year.

For medium-sized companies, it declined by 0. 7 percentage points and for small companies, it was 1.3 percentage points less than recorded in November.

Production and new orders, two of the five sub-indices that make up the manufacturing PMI, jumped above the 50-point cutoff.

But employment, raw material supplies, and supplier delivery time ended the year in contraction.

The PMI for businesses not related to manufacturing was 55.7 in December, the fourth-best of the year after it declined to 29.6 in February.

The services sector, which represents more than half of the country’s GDP, stood at 24.8 points in December, 0.9 percentage point less than the previous month.

The index of expected economic activity, which measures the confidence of the non-manufacturing companies in future market development, grew 0.6 points to 60.6.

The comprehensive PMI production index, combining manufacturing and non-manufacturing industries, stood at 55.1 points in December, compared to 55.7 in November, the best of the year.

NBS statistician Zhao Qinghe, in a statement on Thursday, said that despite the slowdown in December in the manufacturing PMI, the industry “maintains a good inertia of sustained recovery.” EFE-EPA


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