Data released by Caixin/S&P Global showed that in January, activity in China's manufacturing sector expanded for the third month in a row, but the pace of expansion did not change compared to December. Meanwhile, business confidence rose to a 9-month high. However, today's data contrasted with the official report, which showed yesterday that manufacturing activity contracted again last month due to persistently weak demand.
The Caixin/S&P Global manufacturing PMI was 50.8 points, the same as in December. Economists had expected a decline to 50.6 points. A value above 50 points indicates an expansion of activity in the sector.
The report showed that production increased again in January. The rate of growth was little changed from December and, though modest, was among the fastest recorded over the past year and a half. Total new orders increased for the sixth month in a row, although the growth rate was the weakest since October 2023. Meanwhile, new export orders increased for the first time since June 2023, albeit slightly. But in January, companies continued to reduce staff, while efforts to attract and secure new orders prompted them to lower selling prices for products. In general, the increased deflationary pressure has strengthened investors' confidence in further easing of monetary policy.