The Strategist

China's PMI declines for the second month in a row

11/01/2021 - 02:20

China's business activity index (PMI) for the manufacturing sector stood at 49.2 points in October, the National Bureau of Statistics said. This is the second consecutive month of falling of the country's industrial production rate.

Maximiliano Hebel
Maximiliano Hebel
China's PMI reading was 49.6 points in September. A reading below 50 points indicates a slowdown in business activity and this was the first decline in 18 months. The reasons for the fall in the PMI in the industrial sector were the country's energy crisis and a sharp rise in some commodities. For example, price index of major commodities in October rose by 8.6 points at once compared to September - up to 72.1.

The real level of the index of business activity in the industrial sector turned out to be noticeably worse than analysts' forecasts for the second month in a row. In September the analysts expected the PMI to be at 50 points, and in October they expected it to fall to 49.6 points.

In addition, the industrial production index fell by 1.1 points to 48.4 in October. The index was lower only during the 2008-2009 global financial crisis and in February 2020 at the peak of the COVID-19 in China.