China’s manufacturing index in January was 49.6, while in December it was 50.5, portraying that there was no expansion in the past month. Additionally, Asian stocks experienced a loss because the statistical data pointed to a weakening demand for manufacturing. Qu Hongbin, a chief economist in Hong Kong stated that today’s report “implies softening growth momentum for manufacturing sectors, which has already weighed on employment growth.” Another economist, Hu Yifan, thinks that the rising funding costs are adding difficulties to the industry and that the PMI will report a continued declining trend.
Car manufacturers are expected to see a drop between 4-6% in sales according to the China Association of Automobile Manufacturers. Geely Automobile Holdings, Ltd., who is the parent owner of Volvo Cars, is expected to see their sales growth drop from 14% last year to 6% this year. This report gives one of the first indications of how the economy is doing thus far in 2014, and forecasts for year-end.