none

CHINA MANUFACTURING STILL SLUGGISH

28-01-2015
by 
in 

China’s manufacturing sector has strengthened slightly at the start of the year, but still remains weak overall.

A preliminary reading of the HSBC China Manufacturing Purchasing Managers Index rose to 49.8 in January from a final reading of 49.6 in December. A reading above 50 indicates expansion, while a reading below 50 indicates contraction.

News of the contraction comes just days after Chinese authorities said growth in the world's second largest economy had slowed to its weakest in 24 years.

China's economy expanded 7.4% in 2014 from a year ago, missing its official growth target of 7.5% for the first time in 15 years.

Overall growth has been hampered by problems in manufacturing.

“(The) data suggest that the manufacturing slowdown is still ongoing amid weak domestic demand,” HSBC economist Hongbin Qu said in a statement accompanying the figures.

China’s export sector has held up relatively well in recent months, partly thanks to a stronger US economy.

Exports rose 6 per cent last year and new export orders continued to rise in January, according to the PMI, though more slowly than the month before. The weakness can instead be pinned on feeble sales within China.

Employment in the manufacturing sector also fell at a faster rate in January, the PMI showed, which is potentially a worry for China’s government. Chinese leaders have said they are comfortable with slowing growth as long as job creation continues apace. If that changes, they may move more aggressively to stimulate the economy. “Employment is a lagging indicator, and the manufacturing sector has been in a soft state for quite a while,” said Macquarie economist Larry Hu. “In 2015, China’s labour market will have more problems.”

Prices for both raw materials and finished products fell faster in January than the month before, the PMI said, part of a pattern of deflation that has become entrenched in China’s industrial sector over the past three years. 

Related news & editorials

  1. 19.02.2019
    19.02.2019
    by      In
    The adoption of artificial intelligence is rapidly growing in the workplace; however, to take full advantage of the opportunities, businesses need to overcome lingering doubts from their customers and employees, according to new research from Genpact, a global professional services firm focused on... Read More
  2. 19.02.2019
    19.02.2019
    by      In
    The 2018 needles in strawberries episode served as a warning to all of Australian industry: failure to take security seriously can have disastrous consequences. However, it also served to highlight just how vulnerable manufacturing industry is to malicious acts, whether by disgruntled employees or... Read More
  3. 19.02.2019
    19.02.2019
    by      In
    MachineryHouse has continued its expansion across the ditch with the opening of a second branch in New Zealand. The new Christchurch MachineryHouse joins the existing branch in Auckland, and will greatly improve the service to customers all over the South Island.
    The new retail operation opened in... Read More
  4. 19.02.2019
    19.02.2019
    by      In
    element14.com, the world’s largest electronic design community, has launched the ‘Pi-Casso’ design challenge, encouraging its members to think outside the frame and create digital artworks that showcase the versatility of the Raspberry Pi 3 Model B+, either by using the computing power of Pi as the... Read More