China: January data may not fully reflect virus impact – Standard Chartered Bank

Economists at Standard Chartered Bank offered a brief review of Monday’s release of Chinese Manufacturing PMI, which eased 0.2ppt to 50.0 in January from 50.2 in December.

Key Quotes:

“Domestic demand showed signs of recovery. While the new export orders sub-index fell below 50, the new orders PMI picked up 0.2ppt to 51.4. Non-manufacturing PMI rebounded 0.6ppt to 54.1 on a recovery in construction activity. However, officials noted that the survey was conducted before 20 January, suggesting the result does not fully reflect the impact of the coronavirus outbreak.“

“Export growth likely eased and import growth may have contracted in January partly on seasonality and normalisation after front-loading activity in December ahead of the Lunar New Year holidays. The signing of the phase one trade deal likely supported imports. The coronavirus outbreak is unlikely to have affected trade activity given the new year holidays started earlier this year on 24 January.”