A recent private reading has unveiled a significant slowdown in manufacturing activity across China for December 2024, primarily attributed to a decline in export orders. The Caixin China manufacturing purchasing managers' index (PMI) fell to 50.5, a notable drop from November's 51.5, according to a press release by the media group in collaboration with S&P Global.
This latest figure, while still indicating expansion, fell short of the analysts' expectations which had forecasted a reading of 51.7 as reported by Reuters. Within the world's second-largest economy, manufacturing production has increased consistently, marking its fourteenth consecutive month of growth.
However, the pace of this growth has started to decelerate, reflecting a contraction in export orders for the first time since November, following a robust seven-month period of expansion. Caixin's report pointed out that the increases in both new orders and production were less robust compared to previous months, with average selling prices experiencing their first decline since September.
The data also emphasized a notable decline in sentiment attributed to ongoing global trade tensions, particularly in relation to the US. Wang Zhe, a senior economist with Caixin Insight Group, commented on the findings, stating, "Business optimism weakened. Concerns among surveyed companies were largely centered on the outlook for economic recovery and the trade conflict between China and the U.S.
While future output expectations continued to increase, the gauge saw a drop of more than 3 points from November." The private reading aligns with recent official statistics from the bureau, which similarly indicated a softening in manufacturing activity, even as it remains in the expansion territory.
This developing situation underscores the complexities facing China's manufacturing sector amidst fluctuating global trade dynamics..