China’s factory activity faltered in January as weak domestic demand dragged down production at the start of the new year, an official survey showed on Saturday.
The official purchasing managers’ index (PMI) dropped to 49.3 in January, from 50.1 in December, below the 50-mark separating growth from contraction. It missed a forecast of 50 in a Reuters poll of analysts.
Sub-indexes of new orders and new export orders also saw declines, respectively, down to 49.2 from 50.8 in December and 47.8 from 49.0 in December.
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The non-manufacturing PMI, which includes services and construction, dropped to 49.4 from 50.2 in December, falling to its lowest since December 2022.
A statistician with the National Bureau of Statistics, Huo Lihui, said in a note that some types of manufacturers traditionally enter a slow period in January and market demand remains weak.
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But the headline figure masked deep-seated imbalances in the economy. Retail sales weakened further in the final quarter, dragging fourth-quarter gross domestic product growth to a three-year low.
