China factory activity growth slows in December, Caixin PMI shows
By Alexander Bueso
Date: Thursday 02 Jan 2025
(Sharecast News) - Growth in factory sector activity in the People's Republic of China slowed at the end of 2024, amid softer export demand, the results of a closely followed survey revealed.
Private sector survey compiler Caixin reported a decline in its manufacturing sector Purchasing Managers' Index from a reading of 51.5 in November to 50.5 for December.
Economists had forecast a reading of 51.7.
The 50 point level marked the threshold between a contraction and an expansion in the sector with successively lower or higher readings above that mark denoting faster or slowed rates of decline or growth.
Hence, Thursday's reading was consistent with a slower pace of expansion than in November, although it was the third straight month above 50.0.
"While improvements in underlying demand and successful business development efforts led to incoming new orders rising for a third straight month, the rate of growth eased on the back of softening external demand," Caixin noted.
"Indeed, export orders contracted after increasing at the fastest pace in seven months in November."
Gabriel Ng at Capital Economics chipped in saying: "While the Caixin manufacturing PMI suggests that factory activity softened in December, wider economic momentum still looks to have improved thanks to faster growth in services and construction.
"Increased fiscal support should continue to lift growth in the near-term given that deficit spending is likely to be front-loaded at the start of 2025."
As an aside, recent reports out of China pointed to somewhat increased social tensions on account of the slowdown in growth, including heightened demand for public sector jobs among university graduates due to the relatively safer employment conditions when compared with the private sector.
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