China's Factory Activity Slows Amid Trade Uncertainties, Caixin Survey
Beijing, China - China's manufacturing sector experienced a moderate growth in January, with a slight dip from the previous month, a private-sector business survey revealed on Monday.
The Caixin/S&P Global Manufacturing Purchasing Managers' Index (PMI) stood at 50.1 in January, marginally above the growth threshold of 50. While this fell short of analysts' expectations of 50.5, it outperformed the official PMI, which indicated a contraction in manufacturing activity.
The survey highlighted a notable increase in production and total new orders, driven by both domestic and export-oriented demand. Exporters rushed to fulfill orders before the Lunar New Year holiday and potential tariffs.
However, new orders from abroad declined for the second consecutive month, reflecting the impact of trade uncertainties. Average selling prices also decreased, indicating competitive pressures and market share concerns.
Employment levels faced a significant drop, reaching their lowest point in nearly five years. Manufacturers cited cost-cutting concerns and non-replacement of job leavers as reasons for the decline.
Despite the challenges, manufacturers expressed optimism, citing improving domestic demand and expectations of government support measures.
"Rising uncertainty in international policies poses challenges for China's export environment and the overall economy," said Wang Zhe, economist at Caixin Insight Group. "Economic policies must be adapted promptly to changing circumstances to mitigate risks."
The Caixin survey suggests that while China's manufacturing sector is facing headwinds, it has some resilience, supported by domestic demand and expectations of government support.