Activity in China's manufacturing sector declined for a sixth consecutive month in January, suggesting a deepening economic downturn, The CLSA China Purchasing Managers Index (PMI) a said on Feb. 2.
The index which measures manufacturing activity nationwide, stood at 42.2 in January and although it is up from 41.2 in December, overall output still contracted. A reading above 50.0 means the manufacturing economy is expanding, while a reading below 50 indicates an overall decline.
The direction of China's manufacturing sector, which accounts for more than 40% of the economy, reflects the overall direction of the world's third-largest economy. "The fact that the PMI has bottomed is encouraging but should not be taken as evidence of recovery. All activity and demand indices remain well below the 50 break-even line," said Eric Fishwick, head of CLSA Economic Research.
The PMI is based on data compiled from a monthly survey of purchasing executives in more than 400 manufacturing companies in various industries across the country.
The slowdown in the Chinese economy -- which grew just 9% in 2008 compared with 13% the previous year -- has left about 20 million rural migrants unable to find work, the government said on Feb. 2. Beijing has acknowledged mass job lay-offs were heightening concerns about social unrest.
Copyright Agence France-Presse, 2009