China’s manufacturing growth and new orders both fell sharply in February. HSBC’s flash purchasing managers’ index (PMI) dropped from 52.3 in January to 50.4 this month, taking most analysts by surprise.
The new orders sub-index fell to 50.9 from 53.1 in January, and new export orders to 49.8 from 53.7.
Commenting, a HSBC economist said the Chinese economy “was still on track for a gradual recovery.”
However, Nomura warned that the drop could not be fully explained by the impact of Chinese New Year, which fell in February this year compared to January in 2012. “Over the period 2005-12 there are five years in which the holiday fell in February and the HSBC PMI averaged only a 0.95 percentage point dip,” said Nomura’s Zhiwei Zhang.
“The signal from the HSBC PMI is inconsistent with that from the flash MNI indicator, which jumped to 61.79 in February from 55.16 in January, and casts a doubt on how strong the growth recovery is.”
He said China’s leaders would probably wait for the combined January/February macro data due to be released on 9 March before making an assessment of economic conditions and deciding forward policy.
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