China’s industrial activity is contracting amid the Covid-19 outbreak, the biggest decline since early 2020.
China’s manufacturing fell for a third straight month in December, the biggest drop since early 2020 as the country battled a surge in COVID-19 cases after easing pandemic control measures.
The monthly purchasing managers index fell to 47.0 from 48.0 in November, according to data released by the China National Statistical Corporation on Saturday. This decline is the largest since February 2020, when the COVID-19 pandemic began.
The National Statistics Office reported that the non-manufacturing purchasing managers index stood at 41.6 in December, compared to 46.7 in November.
A value above 50 indicates expansion, while a value below 50 indicates contraction.
The cut comes as China abruptly eased coronavirus restrictions earlier this month after years of trying to eradicate the virus. The country of 1.4 billion people is currently facing a nationwide outbreak and authorities have stopped publishing a daily count of COVID-19 cases.
According to the Statistics Office, the construction sector continued to rise in December, as the business activity sub-index hit 54.4, down 1 percentage point from the previous month.
The service sector was weaker in December as COVID-19 and other factors weighed on market activity. The business activity sub-index fell 5.7 percentage points from the previous month to 39.4 points.
However, sub-indices measuring commercial activity in the sectors of air transport, communications, radio and television, satellite broadcasting services, monetary and financial services, exceeded 52 and remained in the expansion range.
The business activity sub-indices for retail, ground transportation, accommodation and catering were below 35.
Demand in the non-manufacturing market also declined, with the new orders sub-index falling 3.2 percentage points from the previous month to 39.1.
“Some companies surveyed reported that due to the impact of the pandemic, logistics resources were insufficient and delivery times were extended,” said Zhao Qinghe, chief economist at the Bureau of Statistics, in a published analysis of the December data.
China is likely to miss its 5.5% economic growth target this year as experts cut their annual growth forecast to 3%, the second weakest growth since at least the 1980s.
Source: Xinhua + Associated Press