China's manufacturing sector grew at a steady pace in January, as production rose at its fastest pace in 13 months, data from Caixin and IHS Markit showed.
The seasonally adjusted Caixin/Markit Purchasing Managers' Index was unchanged at 51.5 in January compared to 51.5 in December 2017. A reading above 50 points to expansion, which the sector has done in the past eight months.
The continued improvement in operating conditions was driven by manufacturing output growing at its fastest rate since December 2016 on the back of improving demand. Total new orders rose for the 19th straight month, which added pressure on operating capacity.
"However, overall new business and new export orders increased at a slower pace than in the previous month, pointing to slightly moderating demand," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.
Employment fell in January as companies downsized, but the rate of job losses was at its slowest pace in nearly three years.
The rate of input price inflation slowed to a five-month low while output charges rose at their weakest pace since June 2017.
Business optimism strengthened to a four-month record in January bolstered by forecasts of improving market conditions.
"The manufacturing industry had a good start to 2018. Going forward, we should keep a close eye on the stability of the demand side," said Zhong.
