Mixed PMI readings at end of 2018

Source: Xinhua | 2019-01-02

THE Purchasing Managers’ Index for China’s manufacturing sector came in at 49.4 this month, down from 50 in November, the National Bureau of Statistics said yesterday.

It was the first contraction since July 2016 and the weakest reading since February 2016.

A reading above 50 indicates expansion, a reading below reflects contraction, and a reading at 50 indicates no expansion or contraction in manufacturing activity on a monthly basis.

The bureau’s senior statistician Zhao Qinghe said intensified international trade friction and slower global economic growth partly affected China’s manufacturing PMI in December.

The sub-index for production edged down from 51.9 in November to 50.8 in December, while the sub-index for new orders dipped from 50.4 to 49.7 during the same period.

“Some industries have gradually entered the off-season of production, and companies are cautious about recent market expectations,” said Zhao.

“Second, due to factors such as more external environmental variables and slower internal demand, the recent import and export boom has been lower.”

Zhao said China’s manufacturing PMI averaged 50.9 in 2018, showing the manufacturing sector, in general, maintained growth.

On Saturday, Chinese President Xi Jinping and US President Donald Trump held a telephone conversation, expressing their willingness to push for implementation of their agreements reached earlier last month.

During their meeting on the sidelines of the G20 summit in Argentina, Xi and Trump agreed to a ceasefire after months of a trade war.

The phone talks boded well for the two countries’ ongoing trade consultations, which are of global concern. Both Xi and Trump stressed the progress made so far in the trade talks while voicing hope for further results that can bring benefits to both sides and the world as well.

Yesterday’s data also showed that China’s non-manufacturing sector remained steady in December, with the PMI for the sector standing at 53.8, up from 53.4 in November. The non-manufacturing PMI averaged 54.4 in 2018, remaining in general at a relatively high level, said Zhao.

The service sector, which accounts for more than half of the country’s GDP, maintained stable growth, with the sub-index measuring business activity in the industry coming in at 52.3 in December, slightly lower than 52.4 last month.

Rapid expansion was seen in sectors including rail transport, banking, insurance and telecommunications, where the readings were all above 60, the statistics bureau said.

China’s courier sector con­tinued to expand in the first 11 months of this year, according to the State Post Bureau.

The sector raked in 542.88 billion yuan (US$79 billion) of revenue from January to November, up 22.3 percent year on year, with the volume of parcels delivered amounting to 45.29 billion, the SPB said.

In November alone, the sector’s business revenue grew 14.6 percent to 64.83 billion yuan. The volume of delivered parcels saw a 24.4 percent increase to 5.86 billion.

Boosted by booming e-commerce, the express delivery industry has seen fast growth over the past few years. With an average annual growth of 42 percent in the past decade, the sector saw 495 billion yuan of revenue in 2017.

China has said the economy is still on track to hit its growth target of around 6.5 percent, compared with an expansion of 6.9 percent in 2017.