China's December factory prices fall at slowest pace in 10 months

China's factory gate prices fell last month at their slowest pace since February, official data showed on Monday, suggesting China's manufacturing sector continues to see a steady recovery from Covid

BEIJING (Reuters) - China's factory gate prices fell last month at their slowest pace since February, official data showed on Monday, suggesting China's manufacturing sector continues to see a steady recovery from the COVID-19 shock.

The producer price index (PPI) fell 0.4% from a year earlier, the National Bureau of Statistics said in a statement. The index was expected to fall 0.8%, according to a median forecast in a Reuters poll, after a 1.5% drop in November.

The data comes as manufacturing activity in the world's second-largest economy expanded in December but at a slightly slower pace amid higher raw material costs.

On a monthly basis, PPI rose 1.1% in December after increasing 0.5% in November, pointing to improving corporate profitability.

Prices for raw materials fell 1.6% from a year ago, compared with a decline of 4.2% in the previous month.

China's industrial sector has staged an impressive rebound from the coronavirus shock thanks to surprisingly strong exports, helping to fuel a robust economic recovery. But rising global infections - and fresh coronavirus curbs in many countries - may cloud the outlook for Chinese manufacturers.

The consumer price index (CPI) rose 0.2% from a year earlier in December, after easing 0.5% in November, the first fall since October 2009. Analysts in the Reuters poll had forecast a 0.1% rise.

Food prices rose 1.2% from a year ago, compared with a decline of 2.0% in the previous month.

 

(Reporting by Stella Qiu and Ryan Woo; Writing Se Young Lee; Editing by Ana Nicolaci da Costa)