China's Jan. non-manufacturing PMI drops to 52.9%

The growth of China's non-manufacturing sector slowed in January, as indicated by the drop of the Purchasing Managers Index (PMI), the China Federation of Logistics and Purchasing (CFLP) said Friday.

The non-manufacturing sector's PMI, a key economic indicator, fell to 52.9 percent in January from 56 percent one month earlier, the CFLP said.

A PMI reading above 50 percent indicates expansion from the previous month, while below indicates contraction.

"The decline in the index shows that China's non-manufacturing industries expanded at a slower pace last month," Cai Jin, vice chairman of the CFLP, said in the statement.

The index came after China's PMI, a preliminary indicator of the country's manufacturing activity, rose to 50.5 percent in January, the highest level since October, indicating that a slowdown in the world's second-largest economy may be stabilizing.

The country's construction sector was less active in the off-season, which "weighed down the overall growth rate of the index" and countered "the sound development of holiday-related retail sales, catering businesses and transportation," Cai said.

Half of the sub-indices for the non-manufacturing sector fell month-on-month, with the index for new export orders down 0.6 percentage points to 45.8 percent last month, while that for new orders shed 2 percentage points to 48.5 percent.

Bucking the trend, sub-indices for intermediate input prices and business outlook rose to 58.6 percent and 63.2 percent, respectively, according to the statement.

The federation's non-manufacturing PMI is based on a survey of about 1,200 companies in 20 industries including transport, real estate, retailing, catering and software.