Although still plagued by Covid related problems (55% of Chinese companies surveyed said they remeained negatively impacted by Covid in one way or another) the January survey of Sales Managers reflected a rapid turnaround in manufacturing sales. The Manufacturing Sales Growth Index registered an almost 4 point jump in activity compared with the level seen in December.
China Manufacturing Sales Growth Index
Diffusion Index: 50 = No Change
Although very early days to draw firm conclusions, this result does provide some evidence that China may recover from Covid rather faster than widely expected. The Services sector survey showed a much more limited increase on December levels than the manufacturing sector. However, overall weighted activity for both Manufacturing and Service sectors rolled up into the Sales Managers Index Index, showed a near 2 point jump to 49.4, closing in rapidly on the growth level of 50.
Additional good news from the survey was the fact that all Indexes in both Manufacturing and Services sectors showed positive movement either towards or over the no-growth 50 Index level. In conclusion, the rapid changes made in Covid policy from early December by the Chinese Government do appear to be releasing a wave of long suppressed energy, despite the continuing problems associated with the long lock down period.
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