Published On: Sat, Feb 29th, 2020

Manufacturing falls to historic low in China

Beijing: China’s manufacturing industry registered its worst data in February since official record keeping began in 2005, with the benchmark indicator Purchasing Managers Index (PMI) plummeting 14.3 points, the National Bureau of Statistics said on Saturday.

China’s manufacturing industry registered its worst data in February

This is a heavy blow for analysts, who expected a drop in the PMI, but of only 4 to 5 points compared to the January data, reports Efe news.

The coronavirus crisis caused a decline in the manufacturing industry in February, far greater than that recorded in its worst reading so far in November 2008 during the global financial crisis (38.8 points).

A figure above 50 points implies growth and below that implies contraction.

For context, the average recorded in the 12 months of 2019 – the year in which the Chinese economy was affected by the trade war with the US – was 49.7 points.

In the breakdown by company size, large companies fell 14.1 points to 36.3, but medium and small companies suffered even more at 35.5 and 34.1, respectively.

The five sub-indices that make up the manufacturing PMI registered falls of between 13.2 and 23.5 integers: the production index stood at 27.8 points; that of new orders at 29.3; that of employment at 31.8; the delivery time used by suppliers at 32.1, and the provision of raw materials at 33.9.

The hit was even worse in businesses not related to manufacturing, the PMI of which had never registered a contraction since record keeping began in 2007 and went from being at 54.1 points in January to 29.6 in February after a drop of 24.5 points.

In this case, experts of the specialized website Trading Economics predicted a fall of just over 7 points.

The services sector, which represents more than half of the country’s GDP, lost 23 points in February ending at 30.1.

The NBS indicated that, in the breakdown of these businesses, only those related to financial and monetary services and capital market services remained in the expansion zone.

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