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 stated.
The logistics performance index stood at 52.8 percent last month, representing an increase of 0.2 percentage points compared to October, WAM reported citing China Daily.Â
The index tracks business volumes, new orders, employment, inventory turnover, and equipment utility rates within 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, stated 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.
Supportive government policies
Over the past months, Chinese policymakers have introduced a comprehensive set of forceful policies, which encompass fiscal, monetary, and property market measures. These initiatives aim to provide a much-needed boost to anchor market sentiment and strengthen domestic consumption.
Wen Bin, chief economist at China Minsheng Bank, mentioned that the broad-based increase in logistics activity signals that the potent policy package has strengthened the momentum of China’s economic recovery. Both the manufacturing and consumer sectors are regaining their footing after a challenging period.
Read more: China’s economy to grow 5 percent in 2024, contributing 30 percent to global expansion
Seasonal consumption boost
The seasonal uptick in energy and raw material consumption has also bolstered logistics services.
The positive 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 indicated that China’s purchasing managers index for the manufacturing sector—a primary gauge of factory activity—came in at 50.3 last month, up from 50 in October.
The November figure marked the second consecutive month that the manufacturing PMI has remained in expansion, signaling 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, indicating a strengthening of consumer demand in the world’s second-largest economy.
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