China’s official PMI showed the sector in contraction for
the second straight month as the country’s government prepares to set a growth
target for the year.
Reuters and others report that the PMI for February recorded
an overall result of 49.9, slightly up from January’s 49.8. The January result
was the first sub-50 result in 27 months.
Any result below 50 indicates contraction.
The February figures released by the National Bureau of
Statistics were slightly above a median estimate of eight economists polled by the Wall Street Journal.
The new orders sub-index was up slightly from 50.2 to 50.4,
input prices up 43.9 from 41.9, and production slipped from 51.7 to 51.4.
It’s been reported that the People’s Bank of China’s
decision to cut interest rates by 0.25 per cent to 2.5 per cent on Saturday was driven by the weakness in the country’s factories.
The Chinese economy grew 7.4 per cent last year, its slowest
expansion in 24 years.
The national legislature will meet this week to decide a
revised growth target for the year. According to Reuters’ sources, the target
is likely to be around 7 per cent.