March PMI data signals ongoing slowdown in China
According to data from China’s National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing, the country’s manufacturing moved back into expansion in March, although the figure was only barely above the threshold separating expansion from contraction. The official purchasing managers’ index (PMI) increased to a reading of 50.1 in March after decreasing to a reading of 49.9 in February. Any figure above 50 indicates an expansion. Economists had been expecting a reading of 49.7 in March, according to a survey by Reuters.
Analysts commented that the latest data showed that domestic and foreign demand remained subdued due to weaker market conditions, suggesting that the government may need to adopt additional monetary easing in the upcoming months to prevent a steeper downturn.
However, a separate manufacturing PMI compiled by HSBC and Markit Economics declined to a reading of 49.6 in March from February’s reading of 50.7. Any figure below 50 indicates a contraction. The final HSBC PMI also showed that total new orders declined for the first time since December in March.
The Chinese government is targeting economic growth of 7% in 2015 after the economy expanded at 7.4% in 2014.
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