BEIJING – China ended 2020 with a 10th consecutive month of expansion in its manufacturing sector, marking an impressive year that saw the country’s factories incapacitated by the pandemic, just to move backwards as a growth engine for China and the United States. world.
Beijing’s official measure of factory activity ended the year at 51.9, in line with expectations and staying above the 50 mark that separates expansion from shortening, extending a streak that dates back to March . The reading was slightly lower than the November 52.1 reading.
China’s economy was also showing strength outside of its factories. China’s non-manufacturing PMI, which covers services such as retail, aerospace and software as well as the real estate and construction sectors, came in at 55.7 in December, the National Bureau of Statistics said Thursday. While that reading dropped from 56.4 in November, it marked a 10th month of expansion and remains near record highs in more than a decade.
Taken together, the strong completion to the year appears to confirm economies ’predictions for full-quarter domestic and full-year domestic product growth of more than 6% and 2%, respectively. It also suggests a strong start to 2021, with economists inside and outside government planning economic growth of 8% or more in the coming year.
Earlier this month, Goldman Sachs economists raised their GDP growth forecast for the fourth quarter to 6.8% from a previous estimate of 5.2%, announcing expectations for a “stronger move into the year “For the full year, Goldman raised its GDP estimate to 2.4% for 2020 from 2.0% previously, and to 8.0% for 2021, up from an earlier forecast of 7.5%.
Also likely to improve the overall statistical picture was a downward revision by China’s bureau of statistics on Wednesday, which cut the country’s official GDP figure for 2019 to 6.0% from a previous reading of 6.1%. The lower base could give a slight boost to China’s GDP figure for 2020. The bureau of statistics is set to publish full-year figures on January 18th.
Thursday’s PMI data showed some underlying concerns. Manufacturing subindexes measuring production, total new orders and new export orders fell in December.
Nevertheless, the subindex for new export orders stood above 50 for a quarter of a straight month, suggesting continued overseas demand for manufactured goods in China. Subindex measuring China’s export business outlook for the eighth consecutive month in December rose to its highest level this year, reflecting increased confidence of manufacturers in the global upside, Zhao said. Qinghe, economist with the bureau of statistics.
Even with the small rebound in December in the mainline manufacturing volume, Mr Zhao said the pace of repurchase was picking up for the fourth quarter as a whole.
China’s manufacturing PMI did not fall as much as it could have in December, as several Western countries launched another round of coronavirus clearance in mid-December, said Iris Pang, an economist with ING Bank in Hong Kong.
Ms Pang credited China’s continued strength as other exporting countries in Asia were also hit by a resurgence in the pandemic.
“There were a lot of orders flowing back to China,” she said. “China, again, has played a supportive role in exports.”
On the non-manufacturing side, subindexes measuring business activity in the service sector and new orders fell for the entire non-manufacturing sector, although other volume construction activity rose to 60.7 from 60.5 in the previous month.
Grace Zhu and Bingyan Wang contributed to this article.
Write to Jonathan Cheng at [email protected]