FEBRUARY 3RD 2016
CHINA’S PMI KEEPS FALLING, IS IT TIME TO FREAK OUT?
The activity of the manufacturing sector in China and the United States contracted during January. On an opposite note, the Euro Zone expanded, but at a slower rate than the previous month.
The official Purchasing Manager’s Index (PMI) was 49.4 points, while the United States hit 48.2 points. The Euro Zone marked 52.3 points. For China, this is the lowest rate since August 2012, and it is still lower than market expectations.
The service sector PMI marked 53.5, breaking the previous expanding tendency. The non-manufacturing sector has helped to contain the negative effects of China’s economic transition.
The China slowdown has started a chain reaction, affecting its demand of commodities, but also of manufactured goods. Last Monday South Korea reported its biggest contraction on exports since the global financial crisis of 2009. The trade ministry in Seoul showed concerns about its 18.5% fall.Lee Sang -jae, chief economist with Eugene Investment & Security stressed that «shipments being this weak means a recovery in consumption is urgently needed».
Sources:
The Guardian. China manufacturing sector shrinks at fastest rate for more than three years. http://www.theguardian.com/business/2016/feb/01/china-manufacturing-sector-shrinks-for-sixth-straight-month-january-figures-show
World Finance. China Manufacturing Shrinks… Again. http://www.worldfinance.com/home/china-manufacturing-shrinks-again. http://www.worldfinance.com/home/china-manufacturing-shrinks-again
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