China: PMI manufacturing declines at fastest pace in three years 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 49.5% in January to 49.2% in February. The print undershot the 49.5% expected by market analysts and represents the lowest result since February 2016. Therefore, the index lies below the 50.0% threshold that separates expansion from contraction in the manufacturing sector.
February’s reading reflected a deterioration in the output index, which fell below the 50.0%-mark, as well as a steeper decline in inventories or raw materials. Weaker production conditions prompted job conditions to fall at the fastest pace in over three years. On the upside, new orders gained steam in February, suggesting that policy stimulus is slowly boosting domestic growth. Export orders, however, fell to its lowest point in 10 years, highlighting the fragility of global demand. Input prices—a reliable leading indicator for inflation—continued to recover in February after a large decline in oil prices in December dragged on the sub-index.