(Yicai) Dec. 31 -- Activity in China’s manufacturing sector expanded for the third consecutive month in December, despite an unexpected decline, as the effects of the government’s economic stimulus package continue to work through.

The manufacturing purchasing managers’ index came in at 50.1 this month, down from November’s seven-month high of 50.3, according to figures released by the National Bureau of Statistics today. A reading above 50 indicates expansion. The average for the fourth quarter was 50.2 percent, moving into growth territory from the third quarter’s 49.4 percent.

The economy continues to show signs of recovery, but faces significant pressure, said Zhang Liqun, a special analyst at the China Federation of Logistics and Purchasing. The factors driving the economic recovery are at a pivotal stage, contending with market-driven demand contraction and downward economic pressures, Zhang noted.

While new orders rose slightly, ex-factory prices continued to fall, signaling that while there are signs of a recovery in demand, the overall imbalance of supply exceeding demand remains a serious issue, Zhang said, adding that as a result, both production and business activity expectations have fallen.

Zhang said it is essential that more proactive and robust economic policies are swiftly introduced, especially by hiking government investment in public goods, boosting business orders, and driving the sustained recovery of business activities.

The stimulus package rolled out since the end of September has injected strong momentum into the consumer market, said Wen Tao, an expert from the China Logistics Information Center. Coupled with a year-end peak in consumption, demand for factory-made consumer goods is growing rapidly, which is a major force driving the overall recovery in demand, Wen noted.

Overall, the economy ended the year smoothly in December, Wen said. There were signs of stabilization and recovery in the fourth quarter, laying a solid foundation for a positive start to next year. With the coordinated implementation of various policies, the economy is expected to continue recovering in 2025, Wen said.

The non-manufacturing PMI, which includes the construction industry and the services sector, was 52.2 this month, up from 50 last month, the NBS data showed.

The composite PMI, which encompasses the manufacturing and non-manufacturing sectors, stood at 52.2, up from 50.8, indicating an uptick in business activity.

Editor: Kim Taylor