China’s manufacturing activity expanded for an eighth straight month in January as companies ramped up production on solid demand, a Caixin survey showed Thursday.
The Caixin China General Manufacturing Purchasing Managers’ Index (PMI) came in at 51.5 last month, unchanged from that in December, which was the highest reading since August.
The indicator is closely watched by investors as one of the first available monthly barometers of the health of the world’s second-largest economy. A number greater than 50 indicates an expansion in activity, while a reading of less than 50 means a contraction.
Growth in production was the fastest in 13 months in January, with a number of companies surveyed reporting that improving demand conditions and rising new work led them to raise output.
New orders rose for the 19th straight month, though at a slower pace than in December. The increase in new export sales also softened from the previous month, but remained the second-highest rate in five months.
“The manufacturing industry had a good start to 2018,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group. “Going forward, we should keep a close eye on the stability of the demand side.”
Manufacturers increased their buying activity in January to meet higher production needs. Meanwhile, pressure on capacity persisted and became increasingly acute, with work backlogs rising to the greatest extent since March 2011.