BEIJING, Jan 31 (Reuters) – China’s economic activity returned to growth in January after the coronavirus wave passed through the country earlier than expected after abandoning pandemic measures.
Domestic orders and consumption boosted output, but analysts said the economy could see sustained growth in external demand, according to the first broad data to show how quickly China is recovering from the wave of COVID-19 reopening. warned against weakness.
The Official Purchasing Managers Index (PMI), which measures manufacturing activity, rose to 50.1 in January from 47.0 in December, the National Bureau of Statistics (NBS) said on Tuesday. Economists who took part in a Reuters poll had predicted the PMI would be his 48.0. The result was above 50.0, implying growth.
The recovery in non-manufacturing activity was more decisive than economists expected, helped by a seasonal surge in spending for the Lunar New Year holiday. Its index covering services jumped to 54.4 from 41.6 in December.
Both indicators had previously shown the economy had contracted since September.
“PMI data showed a significant improvement in confidence in the state of production, operations and markets,” Bruce Pang, chief economist at Jones Lang LaSalle & Co., said in a note. Of concern, export orders are only 46.1.
China’s export demand fell 9.9% year-on-year last month as foreign economies weakened under pressure from rising interest rates.
Dan Wang, chief economist at Hang Seng Bank China, said the rebound in activity in January was “a bit unexpected because everyone is still very cautious.” “It is difficult to recover his PMI in the same month as the Chinese New Year because a worker usually has two weeks off.”
“All other real indicators – employment, inventories, delivery times – deteriorated.. Export orders fell, which means domestic orders increased significantly,” she added.
But the speed of recovery in activity came very quickly, disrupting jobs and consumer demand, and then declined very quickly, forcing factory managers to resume production and retailers to welcome. Customers are responding to what is increasingly understood to be the wave of infections that have infected their customers.
According to China’s chief epidemiologist, 80% of the Chinese people had already been infected with COVID-19 before the Lunar New Year celebrations began.
Still, January’s PMI report is supported by strong holiday spending. Chinese New Year consumption was already reported to have increased him 12.2% over last year’s holiday period, while holiday travel within China during the same period saw him surge 74%. This is because people went out to celebrate without his COVID-19 restrictions for the first time in three years. .
After almost three years of a COVID-free strategy, China eased its pandemic controls in November and almost completely abolished them in early December.
During the festivities, the factory tried to make up for land lost in last year’s turmoil. Kevin White, who sources household goods in China for a major UK-based retailer, told Reuters his Chinese factory partner was giving workers bonuses to shorten the New Year holidays. said to have provided
The Cabinet said on Saturday it would also aim to boost the recovery in consumption, the main driver of the economy, and help importers.
The IMF on Tuesday also noted the speed of China’s economic recovery. The new mobility boost will be short-lived, it said.
International bodies have revised up their 2023 gross domestic product expansion forecast to 5.3% from 4.4% projected in October, but growth is likely to slow again to 4.5% in 2024. I warned you.
The official composite PMI for manufacturing and services combined rose to 52.9 from 42.6 in December.
The private sector Caixin Manufacturing PMI will be released on 1st February, with a greater focus on small businesses and coastal regions.
Reported by Joe Cash.Editing by Bradley Perrette
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