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China’s manufacturing recovery continued in February, though at a modest pace. The HSBC Purchasing Managers’ Index™ was 50.4, down from 52.3 in January. The figure was the same as the Flash PMI™ reported on 25 February.

This is the fourth consecutive month that China’s manufacturing sector has expanded, but at a slower rate than in January when the index hit a two-year high. The index is adjusted for strong seasonal factors, including the Chinese New Year holiday.

The final February HSBC manufacturing PMI™ suggests a slower pace of expansion.
But China’s
recovery continues

Qu Hongbin,
Chief Economist,
Greater China, HSBC

New orders rose at a modest pace. Anecdotal evidence suggests increased demand from Europe, Japan and the US. Employment grew for the third month in a row, with just over 3 per cent of firms reporting higher job numbers. Suppliers’ delivery times improved for the first time since September 2012.

The rate of inflation, though easing from January, was marked. More than 10 per cent of firms reported increased purchasing costs, mainly because of the cost of raw materials.

Qu Hongbin, Co-Head of Asian Economic Research and Chief Economist, Greater China, said: “The final February HSBC manufacturing PMI™ suggests a slower pace of expansion. But China’s recovery continues on improving domestic demand conditions and the labour market. The pace of ongoing recovery is mild, implying no need for the People’s Bank of China to tighten policy any time soon.”

The PMI™ provides a single-figure snapshot of operating conditions in manufacturing. Any figure above 50.0 signals expansion, while below 50.0 indicates contraction.

The Flash China Manufacturing PMI™ is due for release on 21 March.

The intellectual property rights to the HSBC China Manufacturing PMI™ provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, HSBC use the above marks under licence. Markit and the Markit logo are registered trade marks of Markit Group Limited.

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