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BEIJING/WAM
China’s logistics sector expanded at a steady pace in November, offering the latest sign that domestic demand is picking up and the country’s economic recovery is gaining further momentum, analysts said.
According to China Daily, the logistics performance index stood at 52.8% last month, representing an increase of 0.2 percentage points compared to October, based on data released earlier this month by the China Federation of Logistics and Purchasing.
The index tracks business volumes, new orders, employment, inventory turnover and equipment utility rates in the sector. A reading above 50 indicates expansion, while one below points to contraction.
China’s logistics sector has sustained a robust expansion in the fourth quarter, driven by strengthening industrial upgrades and increased consumer demand, said Hu Han, an analyst with the China Logistics Information Centre.
Hu added that key drivers behind the expansion include rising demand for communication equipment, electrical machinery, furniture and home appliances, agricultural and sideline products, and new energy vehicles.
Over the past months, Chinese policymakers have put forward a holistic set of forceful policies, which includes fiscal, monetary and property market measures, aimed at giving a much-needed boost to anchor market sentiment and strengthen domestic consumption.
Wen Bin, Chief Economist at China Minsheng Bank, said the broad-based increase in logistics activity signals that the potent policy package has strengthened the momentum of China’s economic recovery, with the manufacturing and consumer sectors regaining their footing after a challenging period.
The seasonal pickup in energy and raw material consumption has also boosted logistics services.
The upbeat logistics data aligns with other recent economic indicators, including a rebound in industrial production, stabilizing consumer spending and increased infrastructure investment.
Data from the National Bureau of Statistics showed that China’s purchasing managers index for the manufacturing sector — a main gauge of factory activity — came in at 50.3 last month, up from 50 in October.
The November figure marked the second straight month that the manufacturing PMI has remained in expansion, signalling a sustained recovery in the industrial sector.
According to a report from Zheshang Securities, China’s total retail sales of consumer goods are expected to grow by 4.5 percent year-on-year in November, signalling a strengthening of consumer demand in the world’s second-largest economy.