This post was originally published on this site
A private gauge measuring activity in China’s manufacturing sector rebounded in December, ending a two-month contraction and reaching the highest level since June, as output remained strong and input cost inflation eased.
The Caixin China purchasing managers index rose to 50.9 from 49.9 in November, according to data released Tuesday by Caixin Media Co. and researcher Markit. A reading below 50 indicates contraction, while a result above that signals expansion.
The result points in the same direction as a competing official gauge. China’s official manufacturing purchasing managers index rose to 50.3 in December from 50.1 in November, the National Bureau of Statistics reported Friday.
“Average input costs rose at the slowest pace for 19 months” so that inflationary pressures eased, Caixin said.
In the meantime, the subindex measuring output rose at the quickest rate for 12 months, signaling strong customer demands, Caixin said.
However, the sluggish exports sector remain unchanged from November with “foreign demand remained lackluster, with export orders broadly stagnant,” according to Caixin.
“The subindex of employment stayed in negative territory for the fifth consecutive month in December and hit the lowest point since February,” said Wang Zhe, a senior economist at Caixin Insight Group.
Despite the improvement in demand and supply, the economic recovery isn’t stable just yet, he said.
“The repeated COVID-19 flare-ups and sluggish overseas demand were factors of instability,” Wang said.
