China: PMI ends 2015 in negative territory
January 1, 2016
The Purchasing Managers’ Index (PMI) in December inched up from the previous month’s 49.6% to 49.7%, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP), which publish the index. The print was in line with the result that market analysts had expected and represented the fifth consecutive month of deteriorating conditions in the manufacturing sector. As a result, the PMI is sitting below the 50%-threshold that separates contraction from expansion in the manufacturing sector.
December’s reading reflected a broad-based improvement as all but one of the main components of the index gained ground compared to the previous month. New orders jumped to expansionary mode in December, while production strengthened. Despite remaining in the red, inventories and the supplier delivery time index improved in December. On the other hand, employment continued to deteriorate and the subcomponent fell to multi-year lows. Input prices—a reliable leading indicator for consumer prices—remained deeply mired in contractionary territory, highlighting the severe disinflationary pressures that the Chinese economy is facing. New export orders recovered slightly in December from November’s four-year low.