China’s Dec factory activity likely flat – Reuters poll

China‘s factory activity likely neither grew nor shrunk in December, a Reuters poll showed, amid disruptions from COVID-19 outbreaks and as the economy lost momentum in the fourth quarter.

The official manufacturing Purchasing Manager’s Index (PMI) is expected to fall to 50 in December, from 50.1 in November, according to the median forecast of 24 economists polled by Reuters on Thursday. A reading below 50 indicates contraction from the previous month, above 50 expansion.

“We expect NBS manufacturing PMI to moderate to 49.9 in December from 50.1 in November,” said analysts at Goldman Sachs in a note this week, referring to the National Bureau of Statistics.

“(The) COVID outbreak in Zhejiang province since mid-December probably affected industrial activities, and container throughput data also pointed to weaker trade growth in December compared with November,” they said.

The wealthy Zhejiang province, on China’s eastern coast, saw a small-scale COVID-19 outbreak earlier this month, which has now subsided. Some firms were forced to suspend production.

The world’s second-largest economy, which staged an impressive rebound from last year’s pandemic-induced slump, has lost momentum since the second half as it grapples with a slowing manufacturing sector, debt problems in the property market and sporadic small COVID-19 outbreaks.

Analysts expect a further slowdown in fourth quarter gross domestic product (GDP) growth.

China’s central city of Xian reported on Thursday more than 100 new cases of COVID-19, taking its tally of locally transmitted infections to the highest in any Chinese city this year.

Samsung Electronics and Micron Technology, two of the world’s largest memory-chip makers, have warned that the ongoing lockdown of the city could affect their chip manufacturing bases in the area.

Profits at China’s industrial firms grew at a much slower pace in November, the statistics bureau said on Monday, pressured by falling prices of some raw materials, a faltering property market and weaker consumer demand.

The official PMI, which largely focuses on big and state-owned firms, and its sister survey on the services sector, will be released on Friday. The private Caixin manufacturing PMI will be published on Jan. 4.

Author: Gabriel Crossley, Reuters

You might also like