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Chinese factory sector growth steady in December, official PMI shows

By Alexander Bueso

Date: Tuesday 31 Dec 2019

Chinese factory sector growth steady in December, official PMI shows

(Sharecast News) - China's manufacturing sector continued to expand at a steady pace at the end of 2019 with a gauge linked to new export orders revealing the first signs of growth since mid-2018.
The 'official' factory sector Purchasing Managers' Index was uncheanged from the month prior month level of 50.2 in December.

That was a smidgen better than the dip to 50.1 that economists had penciled-in and as Lee Hardman and Fritz Louw at MUFG Bank pointed out, it came alongside the first positive reading for export orders since May 2018.

On a more dour note, the official services sector PMI, which was also published on Tuesday, retreated from October's reading of 54.2 to 53.5.

Nonetheless, according to the two analysts, because a US-China trade deal "has only recently become a more certain prospect", it could yet take some time for a rekindling of sentiment and investment to show through in the economic data.

Hence, they said that "next month's PMIs will certainly be worth watching out for."

"The announcement of the US-China trade deal and elimination of the December 15 tariffs likely supported manufacturing sentiment," chipped-in analysts at TD Securities.

"Similarly credit and loan metrics have taken a turn for the better, while construction activity is picking up and auto sector output volumes are rising. There are also signs of a nascent recovery in the tech sector."

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