The privately-surveyed manufacturing PMI from China for January, Caixin/S&P Global comes in better than expected at 50.8
- expected 50.6, prior 50.8
Key findings highlighted in the report:
- Production continues to expand modestly, but total sales growth
softens - New export business rises for first time in seven months
- Business confidence improves to nine-month high
And, in brief, commentary from the report:
- Both supply and demand expanded, with supply outpacing demand.
- subindex for total new orders remained
in expansionary territory for six consecutive months - Overseas demand picked up slightly with new export orders expanding for
the first time in seven months - Employment continued to decline.
- Price levels remained weak. Increases in input costs were limited due to
the slight increase in raw material prices. The measure for input costs hit
the lowest level since August. Output prices were even weaker, as growing
market competition constrained companies’ bargaining power, pushing the
gauge back into contractionary territory.
Both the jobs and (lack of) inflation noted in the report are concerns, but not surprises. other data we’ve had for China shows the country firmly in a disinflationary trend, weighing on economic growth.
**
Yesterday we had the official PMIs for December, manufacturing was in contraction for the ninth of the past 10 months:
The official PMI survey covers large and state-owned companies, while the Caixin PMI survey covers small and medium-sized enterprises. As a result, the Caixin PMI is considered to be a more reliable indicator of the performance of China’s private sector. There is more on the difference between the two PMIs at that link above.