Econintersect: The official Chinese PMI just released gave a reading of 50.9 for March, up from a slump to 50.1 in February. The February slump was attributed to the Chinese New Year which fell in that month this year. According to the Financial Times the month following the New Year holiday normally has a vigorous rebound. That did not happen this year. The readings for the official PMI for the past four months (December through March) have been pretty flat: 50.6, 50.4, 50.1, and the current 50.9.
An alternate PMI survey reported by HSBC simultaneously with the official numbers had a reading of 51.6, close to a preliminary “flash” reading reported last week. The strength of the HSBC PMI had been projected onto the expectation for the official survey. The official survey covers large companies, many with government ownership, while the HSBC survey covers mostly small to mid-size privately owned companies. The HSBC survey is more sensitive to China’s export levels while the official PMI contains more influence from the domestic economy.
Both PMI surveys had been close in reading in February, 50.1 (official PMI) and 50.4 (HSBC). In January the official PMI was 50.4 but the HSBC number was much stronger at 52.3.
From GEI News 01 February 2013 and still applicable two months later:
Note: Numbers above 50 indicate expansion while below 50 correspond to contraction.
For much of last year the HSBC PMI was in contraction while the official PMI stayed above 50 for all except two months. Now the smaller companies are reflecting a stronger economy than are the large enterprises.
From the Financial Times, quoting Liu Ligang, chief economist for Greater China at ANZ bank:
“The official PMI figures suggest that the current economic rebound remains fragile and could falter with tightened monetary policy conditions. While the rebound of sub-indices appears broad-based, it is still much lower than the average gain seen in past years.”
Sources:
- Chinese manufacturing picks up speed (Jamilk Anderlini, Financial Times, 01 April 2013)
- China: Unexpected Strength in March PMI (GEI News, 22 March 2013)
- Oh-Oh! China Manufacturing Just Barely Growing (GEI News, 25 February 2013)
- China: Two PMI Surveys Diverge (GEI News, 01 February 2013)
