China’s official Manufacturing PMI (Purchasing Managers’ Index) rose to 50.1 in January 2023 from 47.0 in December 2022, the first expansion in four months. This was due to the Lunar New Year holiday and the re-opening of businesses amid Covid-19 restrictions, which generated increased travel and spending. The NBS (National Bureau of Statistics) reported that the PMI had previously fallen to 47.0 in December from 48.0 in November, as stricter Covid regulations hampered manufacturing activity.
The PMI is an important economic indicator for measuring activity within China’s manufacturing sector – a score over 50 indicates Expansion, whereas a score below 50 means Contraction. Consequently, the uptick to 50.1 signals that the economic recovery from Covid-19 is expected to continue, although other metrics such as GDP growth, employment levels, and consumer spending must also be considered for a thorough evaluation of the situation. Regardless, an increase in the PMI is a positive sign and indicative of stability within China’s manufacturing sector.
Source: National Bureau Of Statistics