The flash PMI (purchasing managers' index) for February has risen slightly but the annual Spring Festival also known as the Chinese new year makes the survey unreliable. It's also likely that the panel response was low.
Even though the New Year began on February 18, it's traditional for most manufacturers to halt shipping of goods two weeks in advance.
The Flash China Manufacturing PMI at 50.1 in February (49.7 in January) was at a four-month high while the Flash China Manufacturing Output Index at 50.8 in February (50.3 in January). Five-month high.
Hongbin Qu, chief economist, China & co-head of Asian Economic Research at HSBC said: “Domestic demand firmed while new export orders contracted for the first time since April 2014. Both input and output prices remain in contraction. Today's data point to a marginal improvement in the Chinese manufacturing sector going into the Chinese New Year period in February.
However, domestic economic activity is likely to remain sluggish and external demand looks uncertain. We believe more policy easing is still warranted at the current stage to support growth.”
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