Factory activity in China is expected to contract for a ninth straight month in December, as domestic demand and factory profits eased, as well as uncertain trade relations with key export markets.
The official purchasing managers' index (PMI), which is based on sentiment surveys, is expected to remain at 49.2 in December, the same as the previous month and below the 50 mark that separates growth and contraction, according to 20 economists surveyed by Reuters. The data will be released on Wednesday.
Chinese manufacturers have yet to fully recover from the impact of the pandemic, and are also being hit by high tariffs from the United States, the world's largest consumer market, even as they seek to diversify.
The global economic slowdown has also had a significant impact on factories in the world's second-largest economy, as Beijing seeks to transform and rebalance an economy that has long relied on manufacturing and exports.
Separate data showed industrial firm profits fell at the fastest pace in more than a year in November, falling 13.1% from a year earlier, in line with slowing economic activity.
Beijing's chief statistician, Yu Weining, stressed that amid the uncertain global environment and the industry's transition from old to new growth drivers, the recovery of industrial firm profits still needs a stronger foundation.
With about 70% of household wealth in China tied up in real estate, the prolonged property market downturn since mid-2021 has continued to weigh on consumer confidence and spending.
Beijing authorities have repeatedly vowed to boost household consumption, strengthen employment and restore prices, but public reaction has been less than encouraging.
In addition, analysis of a Reuters poll predicted RatingDog's private sector PMI would fall slightly to 49.8 from 49.9 the previous month, reflecting ongoing challenges in China's industrial sector.
