Headline: China's Manufacturing Growth Slows, Staffing Levels Fall amid Trade Uncertainties
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China's manufacturing activity expanded at a decelerated pace in January 2025, according to the Caixin/S&P Global manufacturing PMI survey. The PMI dipped to 50.1 from 50.5 in December, marking a four-month low but remaining above the 50-point threshold that separates growth from contraction.
The survey indicates a slowdown in factory activity, with staffing levels declining at the steepest rate in nearly five years. The fall in employment is attributed to non-replacement of job leavers and redundancies driven by cost pressures.
Despite the slowdown, manufacturers reported an acceleration in production and an increase in new orders, reaching the highest pace since November. This suggests improved domestic demand and potential stockpiling by clients ahead of the Lunar New Year holiday and anticipated tariffs.
However, new export orders contracted for a second consecutive month, and factory selling prices fell at the fastest rate since July 2023. This reflects competitive pressures and global uncertainties.
Economists caution that rising international policy uncertainties could pose challenges for China's export-oriented economy. The survey emphasizes the need for well-prepared and prompt economic policy adjustments to navigate the evolving circumstances.
The Caixin survey is considered to focus more on export-oriented companies compared to the official survey, which recently reported an unexpected contraction in manufacturing activity.