China’s manufacturing activity fluctuates as virus risks heighten

31.01.2020 - Petr Mazaylo
China’s manufacturing activity fluctuates as virus risks heighten

China’s manufacturing activity recorded a weak progress in January as export orders declined and new virus contagion contributed to risks that drag the world’s second-largest economy.

The Purchasing Manager’s Index (PMI) sunk down to 50.0 in January, marginally lower than its previous record of 50.2 in December according to China’s National Bureau of Statistics on Friday. The results came in congruent with analysts’ outlook as it reached neutral 50- point mark that segregates growth from contraction every month.

The Purchasing Manager’s Index revealed a rather vague state of the sector.

New export orders retreated back and contracted after its positive performance in December while production declined after hitting its consecutive-month highs. In lie with this, sub-index further sunk down to contraction.

While the index showed positive performance in some areas of the sector, economists remained skeptical that the survey projects relevance to the economy given recent headlines about the novel coronavirus and distortions from Lunar Holidays.

Majority of China-based firms have decided to minimize operation or completely stopped operation during holidays as China extended the celebration of Lunar Holidays to prevent the widespread contagion of the coronavirus.

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