China’s Manufactoring Sector Shrinks for First Time in Two Years

BEIJING (Reuters) – Activity in China’s factory sector contracted in January for the first time in more than two years, an official survey showed on Sunday, which will increase gloom about the outlook for the world’s second-biggest economy this year.

The official Purchasing Managers’ Index (PMI) fell to 49.8 in January from December’s 50.1, a whisker below the 50-point level that separates growth from contraction on a monthly basis.

Analysts polled by Reuters had forecast a reading of 50.2.

A housing slump, erratic growth in exports and a state-led slowdown in investment to help restructure China’s economy has hurt China’s economy in the past year, when growth sunk to a 24-year low of 7.4 percent.

(Editing by Richard Borsuk)