China’s February PMI Increases, But Contraction Still in the Cards
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Although most markets in Asia closed lower on the day, some positive news did come out of China as its factories grew more than anticipated in February.
China’s official purchasing managers index (PMI) increased to 51, topping January’s reading of 50.5 and economists consensus of 50.7, according to the National Bureau of Statistics. That's the highest reading since 51.2 reached last September.
The government new export orders sub-index also grew to 51.1, hitting the highest reading since May of last year.
The HSBC PMI did move slightly higher to 49.6 from 48.8, but was still under the 50 point mark which indicates expansion. The HSBC PMI export sub-index indicates orders volumes are declining as it fell to 47.5.
China’s economic growth is expected to slow for the fifth consecutive quarter. Analysts forecasts it will fall from 8.9 percent in the previous quarter to just over 8 percent.
Nomura's chief China economist, Zhang Zhiwei, noted although the figures rose, the outlook is not encouraging. He highlights the strong rise in inventory levels, while new orders increased minimally.
China’s official purchasing managers index (PMI) increased to 51, topping January’s reading of 50.5 and economists consensus of 50.7, according to the National Bureau of Statistics. That's the highest reading since 51.2 reached last September.
The government new export orders sub-index also grew to 51.1, hitting the highest reading since May of last year.
The HSBC PMI did move slightly higher to 49.6 from 48.8, but was still under the 50 point mark which indicates expansion. The HSBC PMI export sub-index indicates orders volumes are declining as it fell to 47.5.
China’s economic growth is expected to slow for the fifth consecutive quarter. Analysts forecasts it will fall from 8.9 percent in the previous quarter to just over 8 percent.
Nomura's chief China economist, Zhang Zhiwei, noted although the figures rose, the outlook is not encouraging. He highlights the strong rise in inventory levels, while new orders increased minimally.
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