China’s factory activity improves for three months in a row
Job shedding continues in factories.
China’s manufacturing activity has expanded for the third straight month in January as demand and production continued to improve, a closely watched industry survey showed.
The headline Caixin/S&P China general manufacturing purchasing managers’ index (PMI) remained unchanged at 50.8 last month from the month prior, indicating a sustained modest recovery in the overall health of the economic giant’s manufacturing sector.
With the PMI staying above the 50 neutral mark – which separates expansion from contraction – since November, the latest three-month winning streak signals the sector’s longest period of monthly growth for the past two and a half years.
Last month’s strong showing was mainly due to factories raising output for the third month running on the back of better market conditions and higher sales. New orders also increased for the sixth straight month on stronger foreign demand.
Businesses also ramped up their purchasing activity last month to keep up with the orders. Despite the vibrant business activity at the start of 2024, factories continued to trim their staff levels albeit at the slowest rate in five months.
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Looking forward, manufacturers grew more optimistic about their business outlook for the next 12 months thanks to planned investment, new product releases, and the projected improvement in overseas demand.
“Market optimism improved, with the gauge for future output expectations hitting its highest level since last April,” said Wang Zhe, senior economist at Caixin Insight Group. “Some surveyed companies indicated that their own production will grow with the expected increase in market demand in the new year.”