Weak domestic and foreign demand drove down manufacturing in China to a five-month low in February.
The official Purchasing Managers’ Index cooled to 50.1 after seasonal adjustments, Reuters reports, citing the government’s National Bureau of Statistics. The result is down from January’s 50.4 and the lowest mark since last September, “underscoring China’s patchy economic recovery,” the news agency said.
The PMI is a closely watched metric for its influence on sentiment among the wealthy mainlanders who contribute the lion’s share of Macau’s VIP gaming revenue. The 50 mark is considered the demarcation between expansion and contraction in China’s enormous factory sector.
Zhang Liqun, an analyst at Development Research Center, a state think-tank, said the results show economic growth shifting from “a rebounding trend to that of stabilization”.
Others are more optimistic, attributing the data to distortions arising from the Lunar New Year holiday, which fell in February, even though the index has been seasonally adjusted.
“There is a lot of noise in the January to February data,” said Tim Condon, head of Asian economic research at ING in Singapore. “When it settles down we expect the data will reveal that industrial production is growing around 10%.”
Condon predicts China’s economy will grow 9% this year. Economists polled by Reuters in January expect a median growth rate of 8.1%.
