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Chinese manufacturing activity grows more than expected in Feb- Caixin PMI

Published 2024-02-29, 08:56 p/m
Updated 2024-02-29, 08:56 p/m
© Reuters.

Investing.com-- Chinese manufacturing activity grew more than expected in February, a private survey showed on Friday, indicating that certain facets of the economy remained resilient despite broader signs of slowing growth and activity.

The Caixin manufacturing purchasing managers index rose 50.9 in February, more than expectations for a reading of 50.7 and picking up slightly from the 50.8 reading seen in January. A reading above 50 indicates expansion.

The reading was driven by high manufacturing output amid a slight increase in local and overseas orders, Caixin insights said in a note.

The Caixin PMI showed China's manufacturing sector grew for a fourth straight month, largely contrasting with official data released earlier on Friday, which showed manufacturing activity in contraction for a fifth straight month.

The Caixin survey differs from the official reading in its scope of businesses surveyed- wherein it focuses more on smaller, private enterprises, as opposed to the bigger, state-run enterprises covered by the official survey. Investors use both surveys to get a clearer picture of the Chinese economy.

But while the private survey showed some resilience in Chinese manufacturing, Caixin analysts noted that overall economic conditions in the country still remained dour.

"The economy still faces headwinds... This was reflected by total new orders growing more slowly than output, and subdued prices on both the production and sales sides. In addition, domestic and foreign demand remained insufficient while employment continued to contract," Wang Zhe, Senior Economist at Caixin Insight Group said in a note.

China still has a long way to go in its recovery from three years of COVID-linked disruptions. The country is struggling with a sustained deflationary trend, while economic growth also remained largely muted over the past year, despite the lifting of anti-COVID restrictions.

 

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