Manufacturing expands for a 5th month
Print Edition
CHINA’S manufacturing activities expanded for a fifth month in December but the pace fell from November due to slower production, official figures showed yesterday.
The official purchasing managers’ index, reflecting conditions in largely state-owned manufacturers, edged down to 51.4 in December from November’s 51.7, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.
Bureau analyst Zhao Qinghe said activities in high-consumption industries contracted due to environmental protection measures, but expansion in high-technology and consumer goods sectors accelerated, helping sustain overall manufacturing activity.
The sub-index for production registered at 53.3, compared to November’s 53.9.
Zhao said higher costs for raw materials and transport had encroached on profits.
Foreign trade remained positive with the sub-index for new export and import orders staying above the 50 mark for a second month, the bureau said.
“PMI slightly fell in December but still in a good-shaped expansion zone,” the Bank of Communications said in a report yesterday. “Overall production slowed down as year-end holidays drew near. It was also affected by elevated environmental protection measures to limit production against severe smog.”
The note warned of the possibility of consumer inflation heating up due to rapid price increases at the factory gate.
For the whole year, the manufacturing PMI averaged 50.3, compared to 49.9 for 2015.
Chen Zhongtao, an analyst at the China Logistics Information Center, said a combination of positive factors had contributed to China’s economic activity, including increasing demand, rising prices, restructuring and a good job market.
“The PMI index gradually picked up throughout 2016, indicating more solid stabilization in the economy and a clearer positive outlook,” Chen said. “We expect the China economy to grow at about 6.7 percent this year, basically realizing the goals set at the beginning of the year.”
In the services sector, the official non-manufacturing PMI dipped to 54.5 from November’s 54.7 points.
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