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China PMI February 2018

China: Manufacturing PMI falls sharply in February

The manufacturing purchasing managers’ index (PMI), published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP), fell from 51.3% in January to 50.3% points in February. The result came in below market analysts’ expectations of 51.2% and represented the lowest reading in 19 months. Nevertheless, the index remains above the 50% threshold that separates expansion from contraction in the manufacturing sector.

Looking at sub-components of the index, February’s reading was driven by a slower expansion of output, which hit the lowest level in two years. All-important new orders experienced a sizeable decline, while job prospects fell deeper below the 50% mark. Delivery times slowed further in February, while the index for inventories of raw materials grew timidly.

The index for input prices—a reliable leading indicator for overall inflation—declined sharply in February, signaling a deceleration in commodity price increases. Export orders remained entrenched in negative territory, pointing to a worsening external demand.

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