On January 31, the Chinese National Bureau of Statistics released data for January, showing that China’s manufacturing Purchasing Managers’ Index (PMI) was at 49.3%, a decrease of 0.8 percentage points compared to the previous month, falling below the 50 mark indicating contraction. At the same time, the non-manufacturing PMI and the comprehensive PMI output index also dropped below 50. The survey indicated that over 30% of companies experienced a decline in profits.
According to the official website of the National Bureau of Statistics, the manufacturing PMI for January was 49.3%, showing a slight decline from the previous month, signaling a decrease in the manufacturing sector’s business activity level.
Data shows that since April 2025, the manufacturing PMI has been continuously below 50 in the contraction zone, only rising to the expansion phase (50.1%) in December before dropping below 50 again in January.
Breaking down the numbers, the PMI for large enterprises was 50.3%, down 0.5 percentage points from the previous month but still above the critical point; while for medium and small enterprises, the PMI was 48.7% and 47.4% respectively, both below the critical threshold.
Among the five sub-indices constituting the manufacturing PMI: the production index (50.6%) and the supplier delivery time index (50.1%) were above the threshold, while the new orders index, raw material inventory index, and employment index were below the threshold.
Specifically, the new orders index was 49.2%, the raw material inventory index was 47.4%, and the employment index was 48.1%, all showing declines from the previous month, indicating a slight downturn in employment sentiment in the manufacturing sector.
According to the Chief Statistician at the National Bureau of Statistics Service Industry Survey Center, the decline in the manufacturing sector’s business activity level in January was mainly due to some industries entering the traditional slow season and insufficient effective market demand.
Economic analysis from Orient Securities’ Chief Macro Analyst Wang Qing suggests that the overall economic sentiment declined in January due to factors such as the ongoing real estate market adjustment and insufficient effective demand. The future manufacturing sector outlook will be influenced by changes in export growth rates, domestic real estate market trends, as well as the rhythm and intensity of growth-stabilizing policies.
Some Chinese industry analysts, such as Zhang Liqun, a contractual analyst at the China Federation of Logistics & Purchasing, noted that the lack of market-driven demand remains a developing trend, with uncertainties lingering in corporate expectations for future market trends and policy effects, emphasizing the urgent need to strengthen the foundational momentum for economic recovery.
The data from the National Bureau of Statistics’ report on the operation of China’s PMI in January also revealed that the non-manufacturing PMI fell below 50: “In January, the non-manufacturing business activity index was 49.4%, a decrease of 0.8 percentage points from the previous month.”
Specifically, the construction industry business activity index was 48.8%, down by 4.0 percentage points from the previous month, while the service industry business activity index was 49.5%, a decrease of 0.2 percentage points. In the service industry sector, monetary and financial services, capital market services, and insurance industries had business activity indices above 65.0%, while wholesale, accommodation, real estate, and other industries had indices below the critical point.
The decline in sectors like the construction industry and the post-New Year holiday period before the Chinese New Year are affecting the service industry, with residents engaging less in holiday travel and activities.
The report on the operation of China’s PMI in January also indicated that the comprehensive PMI output index was 49.8%, down by 0.9 percentage points from the previous month, suggesting a general slowdown in business operations compared to the previous month.