Explainer | China’s economic recovery ‘may be short-lived’: 4 takeaways from February’s manufacturing, services data
- Official manufacturing purchasing managers’ index (PMI) fell in February, but the Caixin/S&P Global gauge for factory activity edged up
- And while official non-manufacturing PMI rose in February, the Caixin/S&P Global gauge edged down last month
1. Factory activity remains largely unchanged
The new-orders subindex remained unchanged at 49, while the new-export-orders subindex stood at 46.3, compared to 47.2 in January.
Meanwhile, in contrast to the official gauge, the Caixin/S&P Global manufacturing PMI edged up to 50.9 from 50.8 in January.
“We saw conflicting signals in the manufacturing gauges, with the [official] PMI showing a slightly faster decline, owing to weaker export orders, but the Caixin manufacturing PMI gauge showed the opposite,” HSBC analysts said.
“We think uncertainty in the global-demand picture may stay for some time, which means a stronger domestic-demand recovery is needed to offset this.”
And analysts at Capital Economics said that, averaging across both manufacturing PMIs to gauge conditions in industry, “the headline manufacturing reading remained unchanged at 50 and is in line with factory activity remaining largely unchanged last month”.
2. Services PMIs more encouraging
China’s non-manufacturing PMI, which measures business sentiment in the services and construction sectors, climbed to 51.4 from 50.7 in January.
