China Caixin manufacturing PMI worsens to 48.3 in January
The weaker start to the new year sets the country on a soft beginning, and confirms analysts’ views on a sluggish economic performance for this year due partly to effects from the United States-China trade war.
Factory activity among smaller Chinese firms just got worse. A private survey on China’s manufacturing sector showed factory activity contracting more-than-expected in January.
The weaker start to the new year sets the country on a soft beginning, and confirms analysts’ views on a sluggish economic performance for this year due partly to effects from the United States (US)-China trade war.
The Caixin/Markit Manufacturing purchasing managers’ index (PMI) for January was at 48.3 points, sinking from the 49.7 points in December. Economists in a Reuters poll had expected the sector to fall below the 50-mark that separates expansion and contraction, at a reading of 49.5 points.
For last month, the sub-index for new orders went deeper into contractionary mode. But the silver lining came from an increase in new export orders, suggesting some rebound in orders after the US-China called for a trade truce as last year came to a close.
The PMI sub-index for output fell, reflecting softer production demand. The measure for stocks of finished goods fell into contractionary mode while manufacturers reduced their inventories as the sub-index for stocks of purchased items fell further.
Official PMI numbers released on Thursday showed China’s manufacturing sector contracting for the second straight month in January, but the reading was still slightly higher than analysts’ expectations.
US-China trade talks conclude for this week
China has been embroiled in a scathing trade war with the US in recent months, affecting manufacturing demand as goods get more expensive.
China’s vice premier Liu He visited Washington on Wednesday and Thursday this week to quell the trade spat between both countries. US president Donald Trump said the talks had a ‘tremendous progress’, bringing an upbeat conclusion to the talks.
China has been broadly affected by the weakened trade as it copes with slowing domestic demand.
China’s growth for last year slipped to the lowest annual rate since the 1990s while its 2018 fourth quarter growth slowed to the weakest since the global financial crisis, as domestic and foreign demand slackened amid the country’s trade conflict with the US.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
