Breaking | China’s factory activity contracts in January, breaking 3-month expansion

China’s manufacturing purchasing managers’ index contracted in January, denying the economy an early boost in 2025.
Breaking | China’s factory activity contracts in January, breaking 3-month expansion

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China’s factory activity fell back into contractionary territory in January in advance of an early Lunar New Year holiday period, a drop-off following a rush of purchase orders issued in the run-up to the inauguration of US President Donald Trump and a likely escalation of tariffs on Chinese goods.

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The official manufacturing purchasing managers’ index (PMI) – an indicator of factory sentiment – fell to 49.1 in January, compared to 50.1 a month earlier, according to data released by the National Bureau of Statistics (NBS) on Monday.

The monthly reading interrupted an expansionary streak observed in the metric since October.

A PMI reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 signals contraction.

Within the broader PMI figure, the new orders subindex stood at 49.2 in January, down from 51 in the previous month, while the subindex for new export orders fell to 46.4, compared with 48.3 in December.

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Meanwhile, China’s non-manufacturing PMI – which tracks activity in the service and construction sectors – contracted to 50.2 in January after a considerable expansion of 52.2 was reported in December.



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