China’s manufacturing PMI in February 2018
China’s manufacturing PMI (purchasing managers’ index) report for February 2018 indicates a weaker improvement in the manufacturing activity as compared to January. This metric stood at 50.3 in February as compared to 51.3 in January 2018, which didn’t meet the market’s expectation of 51.2.
The manufacturing PMI has been falling gradually since November 2017. The February PMI figure was the lowest performance in the past six years. Let’s analyze some of the key components of China’s manufacturing PMI in February:
- Production volume was disrupted in February and output showed a softer rise in that month. It stood at 50.7 in February as compared to 53.5 in January 2018.
- New order growth stood at 51 in February as compared to 52.6 in January 2018. Similarly, export orders also declined for the second consecutive month to 49 in February as compared to 49.5 in January 2018.
- Employment in the manufacturing sector also declined for the 11th consecutive month. It stood at 48.1 in February as compared to 48.3 in January.
The gradual fall in manufacturing PMI is concerning investors. It seems that manufacturers aren’t very optimistic about the country’s short-term demand outlook. However, the country’s transformation from a manufacturing hub to a consumption-based economy is on track, which is helping the country’s services activity. The business confidence also remained strong at 58.2 in February as compared to 56.8 in January.