China’s PMI hit the year low 50.1% in December 2014

National Bureau of Statistics of China released the most recent data which showed that the official manufacturing Purchasing Managers’ Index (PMI) in December dropped to 50.1% from 50.3% in November, representing that China is on the brink of contraction. December 31, 2014, the HSBC China Manufacturing Purchasing Managers’ Index which measures that nationwide manufacturing activity fell even lower to 49.6 indicating that contraction is already happening. Previously, 11 market research institutions had predicted the manufacturing Purchasing Managers’ Index (PMI) of China to drop to a 18 months low of 50.1% caused by the inadequate momentum in the manufacturing sector.

On the other side, the China’s non-manufacturing PMI rose to 54.1% compared to 53.9% recorded in November, 4.1 percents higher than the threshold (A reading of 50 or above indicates economic expansion, a reading below that 50% suggests contraction). This continuous growth of the reading for 2 months in a row showed a moderate growth in China’s non-manufacturing sector.

In term of size of enterprises, the PMI of large-sized enterprises was 51.4% which remained above the threshold; the PMI of medium-sized enterprises was 48.7% while a reading of 45.5% was recorded for the small-sized enterprises suggesting a business contraction of the small and medium-sized enterprises in China.

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