In January, Caixin China'S Manufacturing PMI Dropped To 51.1, The Lowest Since September 2019.

In February 3rd, Caixin China's Manufacturing Purchasing Managers Index (PMI), released in January, recorded a 51.1 decline, a slight decline of 0.4 percentage points, the lowest in five months.

This trend is consistent with the PMI of the National Bureau of statistics. The PMI released by the National Bureau of statistics in January recorded 50 of the manufacturing industry, which fell on the line of prosperity and decline, down from 0.2 percentage points last month.

The new orders index fell for the three month in a row, falling to its lowest level since October 2019 in January, but still expanding. This part was dragged down by external demand. In January, the new export orders index ended three consecutive months of expansion, falling below the dividing line. The manufacturers surveyed showed that overseas demand was relatively weak.

In January, the growth rate of factory production also slowed down, and the output index dropped to the lowest level since September 2019, but it was above the dividing line of prosperity and drought. Categorical data show that consumer category output growth is strongest in January.

In order to control costs, some enterprises took measures to reduce the scale, resulting in a decline in the number of Chinese manufacturing workers in January and the employment index for the first time since November 2019.

Manufacturers are also more cautious about purchasing inventory and finished goods inventory. In January, the purchasing inventory index ended four consecutive months of expansion to the contraction interval. According to the respondents, the drop in inventory is related to the reduction of purchase volume and the reduction of inventory measures. Finished product inventory also returned to decline, finished product inventory index fell to the lowest since August 2019. Some manufacturers say this is related to delivering products to customers.

The average input cost increased further in January, and the increase was the highest since December 2018. Manufacturers generally say that rising costs are related to rising prices of raw materials such as metals, oil and agricultural products. Higher costs lead manufacturers to raise factory prices, but are limited by market competition and the price increases are small.

It is mainly boosted by the first stage agreement between China and the United States. The Chinese manufacturing industry generally expects output to continue to rise in the next 12 months, with optimism rising to the highest level in 22 months. In addition, factors such as expected global demand improvement and the advent of new products have also encouraged manufacturers to take a good look at output prospects.

Zhong Zhengsheng, chairman and chief economist of the new financial think-tank, said that the intensity of China's economic stabilization and recovery has slowed down in early 2020. Although corporate confidence has been boosted by the first stage agreement between China and the United States, due to the limited efforts to improve domestic and foreign demand, there has been no overall replenishment after the production and repair. Follow up China's economy will also be affected by the outbreak of the new coronavirus pneumonia, and it needs a proper counter cyclical policy to be promoted.