The Chinese official purchasing managers’ index (PMI) measuring the performance of the manufacturing industry was at 50.4 in January 2013, down from 50.6 in December.
A PMI reading of above 50 indicates that the industry is expanding.
Economists had anticipated a strong performance from China in January as the country’s economy rebounded well in the fourth quarter of 2012. However, the marginal growth in PMI has disappointed markets.
Ding Shuang, an economist with Citi, told the Financial Times: “In general, we think the rebound is on track but the rebound seems to be quite modest.”
Meanwhile, the country’s main stock index, Shanghai Composite, declined 0.5 per cent in January after a growth of 20 per cent since November 2012.
New orders increased in January to 51.6 from 51.2 in December, due to a surge in domestic demand, while exports declined to 48.5 from 50 in December, primarily due to sluggish external demand.
In January 2013, the output index dipped to 51.3 from 52 in December, while the employment index fell to 47.8 from 49.
Lu Ting, an economist with Bank of America Merrill Lynch, told the Financial Times: “The PMI is a quite inaccurate barometer around the Chinese New Year holiday. We believe the Chinese economy and its related asset markets will remain in a sweet spot in the near term.”
A separate PMI published by HSBC showed that the country’s manufacturing sector had climbed to 52.3 in January 2013, compared to 51.5 in December.