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China Factory Activity Posts Slowest Growth in 7 Months in January, Caixin PMI Shows

China’s manufacturing activity eased in January, posting the slowest rate of expansion for seven months amid weak demand for exports and the domestic resurgence of Covid-19, according to a private survey of manufacturers.

The Caixin China purchasing managers’ index, which is weighted toward small, private manufacturers, dropped to 51.5 in January from 53.0 in December, Caixin Media Co. and researcher Markit said Monday.

Still, January’s reading was the ninth consecutive month that the Caixin PMI held above the 50 mark that separates expansion from contraction.

Both supply and demand continued to grow, albeit at a much slower pace. The subindexes for output and total new orders both slipped from the previous month but remained in expansionary territory for the 11th and eighth consecutive month, respectively.

Export orders dropped for the first time in six months, the data showed.

Employment at Chinese manufacturers also fell in January, while manufacturers recorded the slowest accumulation in backlogs for eight months.

Both the resurgence of coronavirus at home and the continuation of the pandemic abroad suppressed demand, Wang Zhe, a senior economist at Caixin Insight Group, said in a statement accompanying the data.

“The weakening job market and the sharp increase in inflationary pressure should not be ignored,” the economist said.

China’s official manufacturing PMI, which is focused more on large, state-owned companies, fell to 51.3 in January from 51.9 in December, according to data released by the National Bureau of Statistics on Sunday.

The official survey of manufacturers has a much larger sample than the private survey.

 

(END) Dow Jones Newswires

January 31, 2021 21:33 ET (02:33 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

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