The official purchasing managers’ index (PMI) of China fell to a five-month low of 52.9 in January to mis the median forecast of 53.5 in a Reuters’ poll, according to the China Federation of Logistics and Purchasing.
China’s factories slowed a touch in January due to the impact of monetary tightening but input prices went high quickly to keep pressure on the government for tacking inflation despite easing growth.
But analysts cautioned against reading too much into survey results for a single month, particularly as they were likely distorted by a closure of factories and a spike in consumption late in January ahead of China’s Lunar New Year.
Underlining that warning, a separate PMI sponsored by HSBC pointed in the exact opposite direction from the official version, with its headline index edging up in January while its measure of input price inflation eased a touch.
Nevertheless, taken together, the two surveys painted a picture of sticky inflation and a moderate slowdown in the world’s second-largest economy after 10.3 percent growth last year.
“This indicates that the economic recovery trend is not yet clear, and we may see economic growth slow down a bit,” Zhang Liqun, an economist in the Development Research Centre, a think-tank under the cabinet.
The input price sub-index in the official PMI rebounded to 69.3 in January from 66.7 a month earlier, though was still below a peak of 73.5 hit in November.
Brian Jackson, an economist with Royal Bank of Canada in Hong Kong, said, “This is the data point that will likely be of most interest to policy makers. This provides a further reason to think that headline inflation is likely to pick up in the next few months.”