We started the last trading day of the year with data recorded by the National Bureau of Statistics of China. China Manufacturing Purchasing Managers’ Index (PMI) stood at 50.2 in December, according to data released by the NBSC. Besides, the Non-Manufacturing PMI declined slightly to 53.5.
Manufacturing PMI is the early indicator of economic activities in the manufacturing sector. It is collected from the NBSC and complied by the China Federation of Logistics & Purchasing. The PMI exceeded 50-threshold in November and December 2019. We can say that the Manufacturing PMI indicator, recorded above this level, signals a recovery in the manufacturing sector in the Chinese economy. On the other hand, the decline in the Non-Manufacturing PMI indicator, from 54.4 to 53.5, indicates that small manufacturing companies gave their earnings in November back, but the sector is still alive because it has not yet decreased below the threshold.
In February, Manufacturing PMI in China, the second-largest economy in the world, fell to the lowest level in last 3 years. Later, we observed a permanent growth and the PMI was 49.3, the lowest level in the last 8 months. However, while various tax reductions made by the Chinese government supported the manufacturing sector, positive steps towards the U.S. – China trade deal created an optimistic perception on manufacturing managers.