China PMI falls for 10th straight month as factories cut output
Print Edition
CHINA’S manufacturing activity shrank for the 10th straight month in December, a private survey revealed yesterday.
The Caixin General China Manufacturing Purchasing Managers’ Index fell to 48.2 in December from 48.6 in November.
It was the lowest reading since September and indicated an increasingly challenging environment for Chinese manufacturers as production fell for the seventh time in eight months, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.
After picking up for the first time in seven months in November, the Caixin PMI output sub-index dropped to 48.7 in December, its lowest in three months, with anecdotal evidence suggesting firms had cut output due to weaker demand.
As companies cut costs and downsized, employment was also hit, falling to 47.3 in December, the 26th month in a row that employment has contracted.
The weak domestic and overseas demand had led to the first decline in new exports in three months, pointing to a weak start in 2016. Total new orders shrank for a sixth month, highlighting weak domestic demand as well.
“This shows that the forces driving an economic recovery have encountered obstacles and the economy is facing a greater risk of weakening,” said He Fan, chief economist at Caixin Insight Group.
He said the government “needs to simultaneously push forward the supply-side reform.”
The Caixin survey focuses more on small and medium-sized private firms. An official survey, which looks at larger state-owned firms and released last Friday by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, edged up from 49.6 in November to 49.7 in December, though it was still below the 50 level for growth in manufacturing activity.
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