BEIJING (APP) – Chinese factory activity contracted in January for a second straight month, a closely watched private survey showed Monday, a day after the government announced the first official decline in the sector in more than two years.
British banking giant HSBC said its final purchasing managers’ index (PMI) reading for January edged up to 49.7, from 49.6 in December.
But the result still showed shrinkage in the manufacturing sector of the world’s second-largest economy, a key driver of global growth. PMI readings below 50 point to contraction and anything above suggests growth.
The final number was also slightly worse than the preliminary reading of 49.8, HSBC said.
The index, compiled by information services provider Markit, tracks activity in China’s factories and workshops and is a closely watched indicator of the health of the Asian economic giant.
The figure came after an official Chinese survey on Sunday showed manufacturing activity contracting for the first time in more than two years.
China’s official PMI for January, released by the National Bureau of Statistics, came in at 49.8 last month, down from 50.1 in December. That was the first official contraction reading for 27 months.
“We think demand in the manufacturing sector remains weak and more aggressive monetary and fiscal easing measures will be needed to prevent another sharp slowdown in growth,” Qu Hongbin, HSBC chief economist for China, said in the release announcing the bank’s figure.
