China Non-Manufacturing PMI Falls In January

china 020314

An indicator of Chinese non-manufacturing sector activity declined in January, in another sign that the economy is slowing amid Beijing's efforts to push through the planned reforms.

The non-manufacturing purchasing managers' index declined to 53.4 in January from 54.6 in December, the results of a survey by the China Federation of Logistics and Purchasing (CFLP) and the National Bureau of Statistics showed Monday.

An index reading above 50 indicates expansion of the sector, while a reading below 50 suggests contraction.

The new orders index fell slightly to 50.9 from 51 in December, largely reflecting fragile domestic demand. The export orders rebounded marginally in January, with the corresponding index showing a reading of 50.1, up from 49.4 in December.

The business activity index remained at a solid level despite declining to 58.1 from 58.7 in December.

The employment conditions in the non-factory sector remained weak. The corresponding index dropped to 50 from 51.4 in the preceding month.

The weakening of the overall operating conditions among non-manufacturing companies, coupled with the recent poor performance of the manufacturing industry, underpin concerns that growth in the world's second largest economy may continue to decelerate in the coming months.

The official Chinese manufacturing PMI fell to a six-month low of 50.5 in January from 51 in December, according to another report published by the CFLP and NBS on February 1.

Tighter credit conditions and the efforts of authorities to rein in shadow banking as well as local government debt will likely amplify the risks of further slowdown of the economy.

China's economic growth eased to 7.7 percent in the fourth quarter amid slower gains in industrial production, investment and retail sales, according to official data released last month. For the whole year of 2013, the GDP grew 7.7 percent, the same pace as in 2012, which was the slowest since 1999.

In its latest economic outlook report published this week, the International Monetary Fund said that policy measures aimed at slowing credit growth and raising the cost of capital is expected to moderate growth this year as well as the next.

Nonetheless, the Fund upgraded its GDP projections for China to 7.5 percent for this year and to 7.3 percent for 2015.

For comments and feedback contact: editorial@rttnews.com

Economic News

What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.

Follow RTT