China’s Purchasing Managers’ Index (PMI) for the domestic manufacturing industry fell by 0.2 basis point from the year’s high in November to 51.9 in December, according to the National Bureau of Statistics (NBS). Chinese PMI remained above the 50 marks for the tenth straight month and the December PMI is the second high for 2020 indicating steady recovery of China’s manufacturing industry. Rising exports supported recovery from the pandemic early this year.
PMI for the steel industry reversed by 3.4 basis points to 45.8 in December, with both demand and supply showing signs of cautiousness, according to the CFLP China Federation of Logistics and Purchasing. The official PMI, which largely focuses on big and state-owned firms, showed the sub-index for new export orders stood at 51.3 in December, easing from 51.5 a month earlier. A sub-index for small business activity stood at 48.8 in December, sharply down from November’s 50.1 indicating a contraction in activities.
The crucial sub-indices, that of production reversed by 0.5 basis point to 54.2, and that of new orders including both from domestic and exports was 53.6 or down 0.3 basis point from November.
Stricter COVID-19 control measures amid a resurgence of the pandemic in many partner countries in the west and recent domestic infections could dent industrial demand, weighing on the recovery.
Retails sales in the country rose sharply supported by firm demand for autos and communication equipment. In the services sector, activity expanded for the tenth straight month, witnessing slower recovery.