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China Manufacturing Deteriorates On Weak Demand

  • Written by Syndicated Publisher 1 Comment1 Comment Comments
    March 5, 2014

    The HSBC Purchasing Managers’ China PMI Index shows modest deterioration of business conditions in February.


    Key points

    • Both output and new orders decline for the first time since July 2013
    • Payroll numbers are cut at fastest rate since March 2009
    • Solid reduction of output charges

    Chinese manufacturers signalled reductions of both output and new business in February, leading to a moderate deterioration of overall operating con ditions. As a result, firms cut their staffing levels again in February and at the quickest pace in nearly five years. Meanwhile, input costs and output charges both declined at their fastest rates in eight months.

    After adjusting for seasonal factors, such as the recent Chinese New Year festival, the HSBC Purchasing Managers’ Index™ (PMI™) posted at 48.5 in February, up fractionally from the earlier flash reading of 48.3 , and down from 49.5 in January. This signalled a moderate deterioration in the health of the Chinese manufacturing sector.

    February data signalled the first contractions of both output and new orders at Chinese manufacturers since July 2013. The rates of decline were moderate in both cases, and were linked by panellists to weaker-than-expected client demand.

    New business from abroad also declined over the month, and at a modest pace that was little-changed from January. Lower output requirements and fewer new orders led to a fourth successive monthly fall in staffing levels at Chinese goods producers in February. Furthermore, the rate of job shedding was the quickest since March 2009.

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    Images: Flickr (licence attribution)

    About The Author

    Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.  Visit Sitka Pacific’s Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

    You are currently viewing my global economics blog which typically has commentary every day of the week. I am also a contributing “professor” on Minyanville, a community site focused on economic and financial education.  Every Thursday I do a podcast on HoweStreet and on an ad hoc basis contribute to many other sites.

    When not writing about stocks or the economy I spend a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com.


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