This photo taken on May 3, 2018 shows a worker cutting steel at a factory in Huaibei in China’s eastern Anhui province.
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China’s official Purchasing Managers’ Index for manufacturing came in slightly above expectations at 50.2 for the month of December, the country’s statistics bureau said on Tuesday.
Economists polled by Reuters expected the official December manufacturing PMI to come in at 50.1.
Manufacturing PMI was 50.2 for the month of November, said China’s National Bureau of Statistics.
PMI readings above 50 indicate expansion, while those below that level signal contraction.
The National Bureau of Statistics said in a report that production quickened in December, while demand also expanded.
The sectors of food and beverage, clothing, medicine, and automobiles were some of the sectors that saw robust expansion in manufacturing activity, the bureau added.
In December, new export orders increased for the first time since May 2018, according to Reuters’ records.
Even though December was the second straight month of expansion for the official manufacturing PMI, economists from Nomura cautioned that the trend may not be sustainable due to strong growth headwinds from the cooling property sector and worsening fiscal situation.
“We do not think Beijing will overreact to the two consecutive above-50 manufacturing PMI readings, as we believe it learned the lesson from spring this year, when some headline data pointed to a seeming recovery,” they wrote in a note on Tuesday. “We expect Beijing to roll out more easing measures despite limited policy room in coming quarters.”
Tuesday’s data came as the U.S. and China remain locked in a long-drawn trade dispute that has weighed on sentiment.
On December 13, the U.S. and China announced that they had reached a phase one trade deal including some tariff relief, increased agricultural purchases and structural change to intellectual property and technology issues.
The official PMI survey typically polls a large proportion of big businesses and state-owned enterprises. Results of a private manufacturing PMI survey by Markit/Caixin — which features a bigger mix of small- and medium-sized firms — will be released on Thursday.