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China's Manufacturing Expands at 4-Month's Low, HSBC PMI Shows

02-25 11:27 Caijing
The preliminary reading of HSBC PMI was 50.4 in February, down from January's final of 52.3.

China's manufacturing activity is expanding at the lowest pace in four months, a survey shows, underscoring renewed concerns about the outlook in the world's second-biggest economy.

The preliminary reading of a Purchasing Managers' Index (PMI) released by HSBC Holdings on Monday was 50.4 in February, down from January's final of 52.3.

Despite the fall, February's PMI indicates that nationwide manufacturing activity in China has expanded for the fourth month, although at a slower pace in February.

A reading above 50.0 indicates expansion while a reading below 50.0 indicates contraction.

"Despite the moderation of February's flash PMI, the index recorded the fourth consecutive reading above the 50 critical line," Qu Hongbin, chief China economist for HSBC in Hong Kong, said in a statement.

"The underlying strength of the Chinese growth recovery remains intact, as indicted by still expanding employment and the recent pick-up of credit growth," he said.

Some economists may attribute the dip in February's flash PMI to the week-long Lunar New Year which fell in February this year and January last year, although joint publisher Markit says the data is seasonally adjusted to the account for distortions from holidays.

The HSBC gauge's preliminary reading, called the Flash PMI, is based on 85 percent to 90 percent of responses to a survey of more than 420 companies. The data for this month's reading was collected from Feb. 12-21.

 

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