February PMI Slides to 50.3 Due to Chinese New Year Vacation

China’s official purchasing managers’ index reading for February is 50.3, for a 1.0 point decline compared to the preceding month.

Out of the 13 PMI sub-indices compiled by the China Federation of Logistics and Purchasing and the National Bureau of Statistics, raw materials inventories and production and operating activity forecasts both saw on-month increases, while the remaining 11 posted declines.

Production, new orders, procurement volumes, raw materials procurement prices and factory prices all saw declines of more than a point.

Zhang Liqun (张立群), an analyst with the China Logistics Information Centre, said the declines could be imputed to the Chinese New Year vacation.

“The production index and procurement volume index both fell by in excess of 2 points for the February PMI reading,” said Zhang.

“This quite clearly indicates the impact of the Spring Festival. PMI is an on-month index, and the impacts of the 2018 Spring Festival are concentrated in February.

“Compared to January, the decline in production and procurement volumes is highly apparent.”

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