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China Caixin Manufacturing PMI Signals Slight Improvement in February

A private gauge measuring activity in China's manufacturing sector rebounded to expansionary territory in February after tumbling into contraction in January, thanks to an improvement in production and new orders.

The Caixin China purchasing managers index rose to 50.4 in February from 49.1 in January, according to data released Tuesday by Caixin Media Co. and researcher Markit. A reading above 50 mark suggests activity expansion while that below 50 indicates activity contraction.

The result was also in line with a competing official manufacturing PMI, which shrugged off market expectations by rising to 50.2 in February.

Caixin said in a statement that the subindexes for both output and total new orders returned to expansionary territory last month, although total new export orders remained in contraction for seven months in a row.

The subindex measuring manufacturing's employment improved in February, but stayed in contractionary territory for the seventh consecutive month, Caixin said.

Wang Zhe, an economist at Caixin Insight Group, said in the statement that Beijing should enhance support to encourage employment, strengthen structural support for small firms and reduce the tax burden and fund-raising costs for companies.

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