China's manufacturing PMI picks up in December, signaling improved economic vitality
Baku, January 1, AZERTAC
The purchasing managers' index (PMI) for China's manufacturing sector stood at 50.1 in December, up 0.9 percentage points from the previous month, Xinhua reports citing the National Bureau of Statistics (NBS) data.
A reading above 50 indicates expansion, while a reading below 50 reflects contraction.
The PMI for China's non-manufacturing sector came in at 50.2 in December, up 0.7 percentage points from the previous month, returning to expansion territory, NBS data also showed.
China's composite PMI output index stood at 50.7 in December, 1 percentage point higher than the previous month, according to the NBS. The composite PMI output index reflects changes in output across the entire industry in the current period, including both the manufacturing and non-manufacturing sectors.
Huo Lihui, a chief statistician with the NBS, said that all three key indicators, namely the PMIs for the manufacturing and non-manufacturing sectors, as well as the composite PMI, stood in expansion territory in December, indicating an overall improvement in China's economic vitality.
The PMI for large enterprises came in at 50.8, up 1.5 percentage points, while the reading for medium-sized enterprises stood at 49.8, up 0.9 percentage points. The PMI for small enterprises stood at 48.6, down 0.5 percentage points from the previous month, according to the NBS.
In December, the sub-index for production stood at 51.7, up 1.7 percentage points from the previous month. On the demand side, the sub-index for new orders rose 1.6 percentage points to 50.8, according to the NBS.
The supplier delivery time index was 50.2, up 0.1 percentage points from the previous month, indicating that the delivery time of raw material suppliers in the manufacturing industry continued to decrease.
From an industry perspective, the sub-indices for production and new orders in sectors such as agricultural and sideline food processing, textile and apparel, and computers, communication, and electronic equipment all exceeded 53, indicating an accelerated increase in both supply and demand.
In contrast, the sub-indices for non-metallic mineral products and ferrous metal smelting and rolling processing industries remained below the boom-bust line, reflecting ongoing pressure in these sectors.
Driven by the recovery in manufacturing supply and demand, corporate purchasing activity has accelerated, with the purchasing volume index rising into expansionary territory at 51.1.
Wen Tao, an expert with the China Logistics Information Center, said that in December, the earlier introduced policies continued to take effect.
The Central Economic Work Conference held earlier this month clearly emphasized the continued implementation of more proactive and effective macro policies, which coincided with the approaching Spring Festival stockpiling period, driving the release of manufacturing market demand, according to Wen.
"Improved demand and positive policy expectations drove a healthy expansion of production activities among manufacturing enterprises," said Wen.
While the scale expanded steadily, positive structural changes were evident as well. In December, the PMI for high-tech manufacturing stood at 52.5, up 2.4 percentage points month-on-month, indicating favorable industry growth. The PMI for equipment manufacturing and consumer goods industries both reached 50.4, rising 0.6 and 1 percentage points, respectively, from the previous month, entering expansion territory.
"The expectation index for manufacturing production and business activity registered at 55.5, up 2.4 percentage points from the previous month, reflecting continued confidence among manufacturing enterprises in market development," said Huo.
By industry, driven by factors such as pre-holiday stockpiling, the business activity expectation indices in the agricultural and sideline food processing, food, alcoholic beverages, and refined tea manufacturing sectors all rose above 60 percent. Enterprises in these sectors showed increased optimism about recent industry developments.
In the non-manufacturing sector, the business expectations index for the service sector remained relatively high at 56.4 in December, up 0.5 percentage points from the previous month, suggesting growing confidence among service enterprises about future market prospects.
Meanwhile, the construction sector displayed a clear recovery. Its business activity index rose to 52.8 in December, up 3.2 percentage points from November, buoyed by warmer-than-usual temperatures in some southern regions and accelerated construction progress ahead of the New Year and Spring Festival holidays.
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