NBS: China Jan manufacturing PMI inches down to 50

China’s Purchasing Managers’ Index (PMI) for the country’s manufacturing industry inched down to the brink of the expansion zone, falling 0.2 basis point on month to 50 for January without taken into consideration of the impact of the Novel Cornavirus (2019-nCoV) outbreak, according to the latest release from China’s National Bureau of Statistics (NBS) on January 31.

NBS clarified that the January PMI was based on the sector's performance over January 1-20, while the 2019-nCov outbreak was known to the public starting January 21 when Beijing commenced the daily update of the virus cases, Mysteel Global noted.

PMI for China's manufacturing industry over Jan 2019-Jan 2020

PMI for China's manufacturing industry over Jan 2019-Jan 2020, source: NBS website

The January PMI indicated that China's manufacturing sector experienced the expansion in demand while a slower growth in production, as the sub-index for new orders recovered 0.2 basis point to 51.4, while that for production reversed down 1.9 basis points on month to 51.3.

A positive sign in the January PMI was that high-tech manufacturing was in the leading position with the sub-index scoring 52.9 or at an accelerated pace of development since September 2019, Zhao Qinghe, NBS' senior statistician was quoted noticing in the release.

As for raw material procurement costs, the index hit its new high of 53.8 since November 2018, and those for China's steel producers and oil smelting and refining enterprises were at the high range of above 60, indicating their rather high production costs.

Manufacturers of all scales saw their performance improved, though the PMI for the small-sized firms stayed in the contraction zone, posting at 48.6 despite a rise of 1.4 basis points month on month.

Among the surveyed manufacturing enterprises, 17.6% complained of lacking human resources, or 2.1 percentage points higher on month, mainly as many workers went back home for the CNY celebration, Zhao highlighted in his interpretation of the January PMI.

As for the non-manufacturing sector, the index for its business activities recovered 0.6 basis point on month to 54.1, or having hovering at 53-54 since the start of 2019.

The sector includes national post, telecommunication, satellite transmission, monetary and financing, insurance, road transportation and construction, and indicators for the construction sector including business activities and new orders had both been in the relatively high range with the former at 59.7 and the latter at 53.8, mainly thanks to the acceleration of infrastructure construction, according to the release.

Written by Hongmei Li, li.hongmei@mysteel.com