Activity in China's factory sector shrank for the second straight month in January, a private business survey showed on Monday, as the new year got off to a rocky start for the world's second-largest economy.
The slack performance, including a 15th month of shrinking factory employment, will add to the debate over how and whether Beijing will accelerate policy easing, with most bank economists calling for a combination of rate cuts and increased liquidity to spur productive investment.
The final HSBC/Markit Purchasing Managers' Index (PMI) for January came in at 49.7 on a seasonally-adjusted basis, just below the 50.0 level that separates growth from contraction. The number was slightly lower than a preliminary "flash" reading of 49.8 but higher than the final 49.6 in December.
The dour data mirrored two official reports released by the government on Sunday which showed weakness in China's manufacturing and services sectors last month.
The official PMI - which is biased towards large Chinese factories - unexpectedly showed manufacturing activity shrank for the first time in nearly two-and-a-half years and firms saw more gloom ahead.
In the private survey, there was marginal expansion in new orders and new export orders, though both were revised downward from the earlier "flash" estimates.
Jobs shrank for the 15th consecutive month, but the rate slowed, with the sub-index reading at 49.5 in January compared to 49.3 in December.
The slide is keeping pressure on Beijing to increase the pace at which workers migrate into services from once high-paying factory jobs, a challenging proposition given weak investment in retraining.
