Jan. 26, 2015 – China’s manufacturing activity shrank for a second month in January, according to HSBC, further evidence that the economy’s momentum is decelerating after posting its slowest growth in more than two decades.
HSBC said its preliminary index of manufacturing activity rose to 49.8 from 49.6 in December. Reading less than 50 on the index’s 100-point scale indicate manufacturing is contracting.
The report comes days after official data showed the economy expanded 7.4 per cent last year, the slowest pace since 1990. The growth rate slipped from 7.7 per cent the year before and signals increasing headwinds for the global economy.
The report found that China’s factories cut jobs and lowered prices at a faster rate in January.
The latest data “suggest that the manufacturing slowdown is still ongoing amid weak domestic demand,” said HSBC’s chief China economist Qu Hongbin. “More monetary and fiscal easing measures will be needed to support growth in the coming months.”
— With files from Kelvin Chan, The Associated Press