BEIJING (dpa-AFX) - China's manufacturing activity fell at the sharpest pace in nearly three years in January, due to declines in both new work and production, survey data from IHS Markit showed on Friday.
The headline seasonally adjusted Caixin Factory Purchasing Managers' Index, or PMI, fell to 48.3 from 49.7 in December.
The latest reading was the lowest since February 2016. Any reading below 50 indicates contraction in the sector.
The total new work fell though new export business increased at a softer pace.
The employment level decreased at the slowest pace in nine months, while outstanding orders increased further modestly.
Purchasing activity decreased, albeit modestly, for the first time in 20 months amid muted demand conditions.
On the price front, the input price declined for the second straight month in a row and the output prices fell, amid general drop in market prices.
Business confidence of twelve-month outlook for production was the most positive since May 2018, thanks to hopes of new products and planned company expansions boosting growth.
'On the whole, countercyclical economic policy hasn't had a significant effect,' CEBM Group Macroeconomic Analysis Director Zhengsheng Zhong said.
'China is likely to launch more fiscal and monetary measures and speed up their implementation. Yet the stance of stabilizing leverage and strict regulation hasn't changed, which means the weakening trend of China's economy will continue.'
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