Japan Manufacturing PMI Slows To 52.3 In January – Nikkei

According to the data released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing, the country’s purchasing managers’ index (PMI) declined to 49.4 in January from 49.7 in December.

The January PMI missed the median 49.6 forecast from a Wall Street Journal poll of 11 economists.

A figure below 50 indicates that factory activity contracted.

Thomson ReutersEmployees work at a production line at inside an automobile factory in HangzhouSHANGHAI (Reuters) – Activity in China’s manufacturing sector contracted at its fastest pace in nearly three-and-a-half years in January, missing market expectations, an official survey showed on Monday.

Manufacturing faces even more challenges this year as the government plans to reduce excess industrial capacity and clean up unprofitable “zombie companies” that survive on bank loans and government subsidies.

“From the muted monthly data for December, there is no significant recovery momentum in the short term”, Citi analysts said.

The Caixin survey focuses more on small and medium-sized private firms, in contrast to the official manufacturing gauge, which focuses more on larger state-owned firms. “Additionally, due to the low oil and commodity prices, and enterprises’ increasing financing pressure at the end of the year, the pressure on manufacturing industry is still heavy”. Beijing had set an official growth target for the year of “about 7%”. It is the weakest index reading since August 2012.

The sub-index measuring production stood at 51.4, a 0.8 percentage point decline from December while the sub-index for new orders declined by 0.7 point to 49.5 in January.