Econintersect: The official government PMI (Purchasing Managers’ Index) for manufacturing came in lower than expected for February. The index was 50.2, down from 50.5 for January and from 51.0 in December and from 51.4, the recent high in November. The reading was the lowest in the most recent eight months and just barely above 50, the dividing line between expansion and contraction. Last week the preliminary (“flash”) reading for the HSBC PMI was released, and it was even lower at 48.3. The final HSBC number will be released tomorrow (Monday, 03 March 2014).
The official PMI number and the one from HSBC often do not agree. They survey two different sets of companies. The official survey is predominantly large companies (many state owned) and the HSBC survey covers small and medium companies, mostly private sector.
Both surveys may have suffered from the Chinese New Year which was celebrated during the survey period. If that was a significant factor then these indices should bounce back in March.
Sources:
- China Manufacturing PMI (Trading Economics, 02 March 2014)
- China Factory Index Decline Adds to Li Growth Challenges (Rachel Butt and Narys Avery, Bloomberg, 01 March 2014)
- China manufacturing slows again in February (Australia Fianancial Review, 02 march 2014)
- China: Further Slowdown (GEI News, 20 February 2014)
