Chinese factory activity increased slightly in December
Manufacturing activity in China edged up in December, official data showed on Friday, beating expectations as commodity prices declined and despite sporadic shutdowns due to Covid outbreaks.
The Purchasing Managers’ Index (PMI) – a key indicator of manufacturing activity – in the world’s second largest economy rose to 50.3, remaining above the 50 point mark separating growth from contraction.
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Data from the National Bureau of Statistics marks a slight increase from last month’s reading of 50.1 and exceeds expectations of analysts who had largely predicted a slight decline.
“With the intensification of efforts to stabilize the economy, such as securing supply and stabilizing prices … the prices of some commodities have fallen considerably and the cost pressure on businesses has increased. is attenuated, ”NBS statistician Zhao Qinghe said.
Factory activity resumed expansion in November after declining for seven months due to power shortages and high commodity prices.
The PMI contracted below 50 for two months in September and October as the electricity crisis hit business operations.
Meanwhile, the non-manufacturing business activity index stood at 52.7% in December, an increase of 0.4 percentage point from the previous month.
The recovery was driven in part by the recovery in the airline and hospitality sector.
Analysts have warned that coronavirus outbreaks in China are likely to continue to weigh on the country’s economy, with sporadic outbreaks – including the ongoing lockdown in the city of Xi’an – affecting consumer confidence and shutting down businesses . The historic northern city of 13 million people is a key destination for tourists.
A separate outbreak of cases in late October spread to 21 provinces and resulted in drastic travel restrictions and closures.
SNB data also showed the construction industry trade activity index fell 2.8% to 56.3%, compared to Beijing’s crackdown on deleveraging on the bloated real estate sector.