BEIJING • China’s factory activity expanded last month but at a slower pace, as the country leads a pack of major economies emerging from the coronavirus slump.
The official manufacturing Purchasing Managers’ Index (PMI) fell to 51.9 last month from 52.1 in November, data from the National Bureau of Statistics (NBS) showed yesterday, remaining above the 50-point mark that separates growth from contraction.
Analysts had expected it to fall slightly to 52.
China’s vast industrial sector has staged an impressive recovery from the coronavirus shock, thanks to surprisingly strong exports.
But tougher coronavirus control measures in many of its key trading partners in the West and recent domestic infections could dent industrial demand, weighing on the recovery.
The official PMI, which largely focuses on big and state-owned firms, showed that the sub-index for new export orders stood at 51.3 last month, easing from 51.5 a month earlier.
But an index for factory prices rose strongly, reflecting solid overseas demand as well as increased shipping costs, even though some export markets are under lockdown, said Dr Iris Pang, chief economist for Greater China at ING.
Economic indicators ranging from trade to producer prices all suggest a further pickup in the industrial sector.
A sub-index for small business activity stood at 48.8 last month, sharply down from November’s 50.1 and returning to contractionary territory.
A sub-index for employment in the official PMI stood at 49.6 last month, slightly up from November’s 49.5.
The Chinese economy is expected to expand around 2 per cent for the full year – the weakest in more than three decades but still much stronger than other major economies struggling to contain new infections.
China has seen a strong improvement in retail sales driven by firm demand for autos and communication equipment.
In the service sector, activity expanded for the 10th straight month, albeit at a somewhat slower clip.
Ahead of China’s peak travel season, the capital Beijing imposed lockdowns on some Covid-19-infected areas, the first since the last coronavirus outbreak in the months of June and July.