China HSBC Manufacturing PMI Hits Seven-Month Low in February
March 3, 2014 2:41 PM EST
China's factory activity shrank again in February as output and new orders fell, a private survey found on Monday, reinforcing concerns of a slowdown in the world's second largest economy.
Final China HSBC PMI dips to six-month low in January as new orders weaken
The final Markit/HSBC manufacturing Purchasing Managers' Index (PMI) fell to a seven-month low of 48.5 in February, the third straight monthly decline, from January's 49.5. The figure was in line with the 48.3 reported in the preliminary version of the PMI released on Feb 20.
A reading below 50 indicates a contraction, while one above 50 shows expansion.
"This calls for policy fine-tuning measures to stabilise market expectations and steady the pace of growth in the coming quarters."
The PMI, which measures sentiment, found that new orders and output both contracted for the first time in seven months, while new export orders contracted less than in January.
Output was likely affected by manufacturers closing for China's biggest annual holiday, the Lunar New Year festival, which began on January 31 and covered early February, although the PMI results are seasonally adjusted.
The employment sub-index also fell for a fourth straight month to 47.2, its lowest point since March 2009.
That sub-index is one of the few indicators to measure the health of China's labour market, a priority area for Beijing, which wants to keep unemployment low in order to maintain social stability.
The official government PMI, released on Saturday by the National Bureau of Statistics (NBS), showed that activity in China's factory sector slowed to an eight-month low in February.
The official survey is weighted more towards bigger and state-owned enterprises and tends to paint a rosier picture than the HSBC/Markit survey, which focuses more on smaller firms and those in the private sector.
China's economic indicators have been mixed of late. Weak investment and declining PMI readings have been countered by surprisingly buoyant exports and bank lending.
The government has been trying to reduce the economy's dependence on exports and enhance the role of domestic consumption, but it is unclear how much growth it might be willing to sacrifice to reach that goal.
Some analysts have said weak PMI numbers would encourage the government to loosen monetary policy in order to keep the economy growing at 7.5 percent, a level that government economists have said could again be the official target, as it was in 2013.
Last year China's economy grew 7.7 percent, steady from the previous year and fractionally above market expectations of 7.6 percent, which would have been the slowest since 1999.
Most Popular Slideshows
- Prince William & Kate Middleton Caught Flirting In A Countryside Dinner Date [PHOTOS]
- Kate Middleton’s Mom Accused Of Being A Social Climber, Prince George Not Seen By Relatives
- Angelina Jolie & Brad Pitt’s Top Secret Wedding Tramps Jennifer Aniston’s ‘Friends’ Reunion & Pregnancy Talks [PHOTOS]
Join the Conversation
- 5.5-Inch iPhone 6 is iPhone Air on Sept 19 Release Date: 5 Things to Consider Before Buying
- Nexus 6 Release Date Update: Moto X+1 Look Leaked, Nexus X or Shamu Moved to Demo Phase
- HTC One M8 for Windows Vs. Nokia Lumia Icon, The Battle Of Windows Phones