China manufacturing growth softens as services pick up

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China’s manufacturing and construction sectors saw growth soften in January as services expansion increased, according to official gauges of business activity.

China’s official purchasing managers’ index for the manufacturing sector came in at 51.3 for January, according to the National Bureau of Statistics, down 0.1 points but still well above the 50-point mark separating growth from contraction. A median forecast from economists had predicted deceleration to 51.2.

Sub-indices for both output (53.1) and new orders (52.8) registered slower growth in January from a month earlier. Growth in input and output prices also slowed markedly, reflected by drops of about 5 and 4 points to 64.5 and 54.7, respectively.

Conditions deteriorated for Large-scale manufacturers, a sub-index for which dropped 0.5 points to 52.7. Contraction among small enterprises also intensified, per a sub-index drop of 0.8 points to 46.4 in January.

In contrast, a sub-index for services industries came in at 53.5, up 0.2 points from the previous month. However, a broader gauge of growth for all non-manufacturing activity rose just 0.1 points to 54.6 as a sub-index for construction activity fell 0.8 points to 61.1.

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