Weakening in Chinese Manufacturing Activity: Surprise Contraction in January

China's Manufacturing Sector Experienced Contraction in January

China's factory activities unexpectedly contracted in January 2023 due to weak domestic demand. This situation had a negative impact on production at the beginning of the new year.

Official Data Released

The National Bureau of Statistics of China reported on Saturday that the official Purchasing Managers' Index (PMI) fell to 49.3 in January 2023, down from 50.1 in December 2022, dropping below the 50 threshold that separates growth from contraction. Economists' forecast in Bloomberg surveys was 50.1.

Sub-Indexes Show Decline

Sub-indexes such as new orders and new export orders also displayed a negative picture, decreasing to 49.2 and 47.8, respectively.

Non-Manufacturing Sectors Also Affected

The non-manufacturing PMI index, which includes services and construction sectors, fell to 49.4 in January, down from 50.2 in December 2022, reaching its lowest level in the past year.