China Manufacturing PMI shows further expansion in February

China’s official purchasing managers’ index (PMI) increased further in February. The headline PMI rose from 50.5 to 51.0, better than the expected 50.7.

Most individual components increased in February. New Orders increased from 50.4 to 51.0, imports increased from 46.9 to 50.8. , and new exports orders increased strongly from 48.9 to 51.1, while employment increased from 47.1 to 49.5.

Despite a seemingly across-the-board expansion, New orders less inventory measure fell from 2.4 to 0.5. Meanwhile, input price increased from 50 to 54, which seems to suggest that some inflationary pressure persist. Also note that this year’s Chinese New Year fell on 23 January. If the rise in PMI for February has anything to do with the usual post-Chinese New Year rebound, the current improvement in activities is an underwhelming one. Not to mention that the February reading for the year is the second worst since record began, with with worst one being 2009, which is after the 2008 financial crisis.

On another note, the HSBC China manufacturing PMI rose from 48.8 to 49.6. While improving, it is still within the contraction territory, suggesting that smaller companies are faring less well than bigger companies.

Source: China Federation of Logistics & Purchasing

Source: China Federation of Logistics & Purchasing

Source: China Federation of Logistics & Purchasing

Source: China Federation of Logistics & Purchasing

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About Zarathustra

Zarathustra: Founder and Managing Editor of Also sprach Analyst. Once an analyst, now an investor and entrepreneur. Based in Hong Kong, but Londoner at heart.