China Caixin PMI falls again as Covid hits supply chains
Chinese factory activity fell again in December as the spike in Covid-19 cases disrupted production after Beijing started dismantling its pandemic curbs, according to a private sector survey published on Tuesday.
Caixin/Markit's manufacturing purchasing managers' index (PMI) fell to 49.0 in December from 49.4 in November. The index has registered below the 50-point mark dividing growth from contraction for five straight months.
“The Caixin survey, though smaller, has greater representations of light industries and private companies than the official survey. In any case, the overall short-term picture for China’s economy is still dark as it struggles with mountains of Covid infections,” said Pantheon Macroeconomics.
China's larger official PMI was released on Saturday showed a much sharper decline, with the activity index falling to a near three-year low.
"Supply contracted, total demand remained weak, overseas demand shrank, employment deteriorated, logistics was sluggish, manufacturers faced growing pressure on their profitability, and the quantity of purchases as well as inventories stayed low," at Caixin Insight senior economist Wang Zhe Group.
Supplier delivery times lengthened for the sixth month in a row, while employment in the manufacturing sector contracted for the ninth consecutive month due to muted production levels and difficulties sourcing workers amid the virus outbreaks.
Reporting by Frank Prenesti for Sharecast.com