CHINA’S factory activity expanded at its slowest pace in five months in January, a private survey showed yesterday.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) eased to 51.1 from 51.5 in January, missing expectations but remaining above the 50-mark that separates growth from contraction for the sixth straight month. Analysts had expected a reading of 51.3.

The findings, which focus mostly on small and export-oriented businesses, were slightly more optimistic than those in an official survey released Friday, which showed growth had stalled.

But they likely did not reflect the early impact of the public health crisis which flared in late January, which could weigh heavily on economic growth in coming months.

“In the near term, China’s economy will also be impacted by the new pneumonia epidemic,” and will need more government support, Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, said in comments on the survey.

Limited improvement in domestic and foreign demand meant some manufacturers did not replenish stocks, said Zhong.

New export orders slipped back into contraction after three months of expansion, while production and total new orders slowed but remained in expansionary territory.

Factories also shed jobs in January for the first time since October.

But business confidence rose to a 22-month high, boosted by a trade deal signed in January between China and the United States, Zhong said. Fears of an epidemic only began to surface late in the month, he said.

(SD-Agencies)