Key points from Markit
- Both manufacturers and services providers see slower increases in activity and new work
- Employment stabilises, ending 19-month sequence of reduction
- Business confidence improves to ten-month high
Comments from Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, on Services:
- New business continued to grow rapidly, though at a marginally slower rate than in the previous month; while input prices and output charges increased at faster rates
On the Composite:
- down 1.3 points from the previous month and weaker than the average level in the fourth quarter of last year
- Manufacturing and services continued to expand in January.
- The economy continued to recover, but the expansion rate has slowed down.
- Meanwhile, inflationary pressures continued to build up as prices increased further.
- The economy is unlikely to maintain the pace of expansion seen in the fourth quarter of last year given that the manufacturing sector's willingness to restock has declined. China's economic growth may decelerate after the first quarter of this year.
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ps. Earlier the People's Bank of China skipped OMOs today, the Bank saying that "overall liquidity in the banking system is staying at a relatively high level"
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Other PMIs from China for January:
- China official January Manufacturing PMI: 51.3 (expected 51.2, prior 51.4)
- China official January Non-manufacturing PMI: 54.6 (prior 54.5)
- China Caixin manufacturing PMI (January): 51.0 (expected at 51.8)