China: Manufacturing conditions continue to worsen in February
March 1, 2016
The Purchasing Managers’ Index (PMI) in February fell from the previous month’s 49.4% to 49.0%, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP), which publish the index. The print undershot the 49.3% that market analysts had expected and represented the lowest reading since November 2011. As a result, the PMI is sitting further below the 50%-threshold that separates contraction from expansion in the manufacturing sector.
February’s reading reflected a broad-based deterioration as all but one of the main components of the index lost ground compared to the previous month. Despite remaining in positive territory, the all-important production gauge fell to an over-seven-year low, while new orders dipped to the lowest point since November 2011. On the other hand, inventories improved marginally in the same month. Input prices—a reliable leading indicator for consumer prices—jumped to a 19-month high in February, thereby suggesting that deflationary pressures are gradually fading away. New export orders remained into the red for the 17th consecutive month in February, highlighting weak global demand.