China continues its losing streak with lower manufacturing PMI figures

The December numbers for the Caixin Manufacturing Purchasing Managers' Index (PMI) of China were released today, January 2^nd.

Caixin’s PMI figures were up marginally, from November’s 50.7 to 50.8 in December 2023, but remained largely flat.

Lower figures for NBS PMI of China

This is in contrast to the National Bureau of Statistics of China (NBS), who released its December figures for its Manufacturing Purchasing Managers' Index (PMI) on December 31^st.

The NBS PMI index reading for December 2023 was 49.0, down from 49.4 in November, which in itself was a drop from October’s 49.5 and September’s 50.2.

This represents the third month in a row that the nation’s PMI manufacturing figures have slowed, rounding up the entire final quarter of 2023 with a consistent losing streak.

What the Chinese Manufacturing PMI numbers mean

The NBS China PMI monthly reading is China’s most respected national figure relating how busy its factories are. This illustrates how much industrial activity (as well as other sectors) are either growing or contracting and so is an important bellwether of the economy.

Generally, an index reading of above 50 on the NBS PMI is considered a sign that factories are sufficiently busy enough to denote that industry is expanding. A reading of under 50 is considered a sign that industrial activity is instead slowing.

Evidence of further slowdown?

In the year from December 2022 to December 2023, nine of China’s monthly NBS PMI figures were below 50, with just two months above 51. The figures arguably add weight to the supposition by some analysts that China's economic slowdown will only worsen in 2024.