China’s Caixin manufacturing Purchasing Managers’ Index (PMI) fell to 51.5 in January from 53.0 in December indicating a slowdown in industrial activity amid resurgence of COVID-19 cases in Northern China and a decline in new export orders. The index extended the loss of momentum that started in November.
The PMI in January improved at the slowest rate in the past seven months, according to latest data. Chinese producers extended their industrial expansion to 11 months, though, the rate of growth slowed. Manufacturers reported slower rise in output and new orders amid a decline in export order due to the subdued demand. While stock shortages and vessel delays impacted supplier performance and increased cost pressures. Higher input costs forced producers to raise selling prices steeply, which was at the highest rate since June 2018.
Export orders dropped for the first time in January since the last six months amid a resurgence of the COVID-19, globally. Employment rate at manufacturers declined marginally in January with manufacturers reporting the slowest addition of work backlogs in the last eight months.
The pace of buying by producers decline in January with firms purchasing in line with sales. Stocks of purchases dipped from a slight increase in December. Average vendor performance also declined at its steepest rate since March.
The degree of business optimism dipped to a eight-month low in January, although, producers expect a rise in output through 2021. Manufacturers expect a rebound in global demand as the impact of pandemic subdues, but remain concerned over resurgence of the virus and disruption of business and supply chains.