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China’s manufacturing sector experienced its first growth in nine months during December, supported by supportive policy measures and a surge in pre-holiday orders. The manufacturing Purchasing Managers’ Index (PMI) increased to 50.1 from 49.2 the previous month, according to data released today. The index had remained below the pivotal 50 mark since April.
The rebound was primarily attributed to the impact of economic policies implemented earlier this year. Additionally, the Mid-December Central Economic Work Conference emphasized adopting more proactive fiscal measures in the coming year, which has bolstered market confidence. As the crucial period for restocking approaches ahead of the Lunar New Year, businesses are releasing accumulated demand by enacting their new-year strategies.
This positive shift signals improving market expectations. However, demand remains notably weak, with many companies still struggling to sell their products. To effectively stimulate orders, increase business and social investments, and support employment and consumption, significant government investment in public goods will be necessary. Such efforts could help expand domestic demand more quickly.
New orders rose to 50.8 from 49.2 in November, and new export orders increased to 49 from 47.6. Production activity reached 51.7, up from 50. Additionally, expectations for future production and business activities jumped to 55.5 from 53.3, marking the highest level since April 2024.
The non-manufacturing PMI, which covers sectors like construction and services, also improved, rising to 50.2 from 49.5, after dipping below the expansion threshold in November. Construction PMI increased significantly to 52.8 from 49.6, while the services PMI was slightly higher at 49.7 compared to 49.5.
The overall PMI output index, combining manufacturing and non-manufacturing data, stood at 50.7, up from 49.7.
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