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What February Global Manufacturing PMI Reports Indicate

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Part 7
What February Global Manufacturing PMI Reports Indicate PART 7 OF 12

China’s Manufacturing PMI Meets Expectations

China’s manufacturing PMI

According to a report by the National Bureau of Statistics of China (MCHI) (FXI), China’s final manufacturing PMI (purchasing managers’ index) stood at 51.6 in February 2017 as compared to 51.3 in January. It beat the market expectations of 51.1. The manufacturing PMI showed a stronger move in February as compared to January 2017.

China’s Manufacturing PMI Meets Expectations

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China’s (ASHR) (YINN) Caixin manufacturing PMI, which tracks small and mid-sized companies, stood at 51.7 in February 2017 compared to 51 in January. It beat the market expectations of 50.8 and was in the expansion zone.

The stronger improvement in manufacturing PMI as compared to January was mainly due to the following factors:

  • Production output increased at a faster rate in February 2017 as compared to January.
  • New export orders showed stronger improvement.
  • Employment growth also showed stronger improvement in February 2017.

Impact on the economy

The uncertainties about trade relations between China (ASHR) and the United States (IVV) (VOO) have increased since the US election. Many market participants believe that Trump has a protectionist approach that may hamper global trade relationships. China’s manufacturing PMI also showed weaker improvement in December and January mainly due to the fall in domestic demand.

In the next part of this series, we’ll analyze US consumer confidence in February 2017.

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