PMI leaps ahead in February

Andrew Cummings
March 1, 2017

Indeed, matters deteriorated in February for Indonesia's manufacturing economy.

Chinese manufacturing activity expanded in February, official figures showed Wednesday, in a sign of strength for the world's second-largest economy as Beijing attempts a hard economic transition.

The country's manufacturing purchasing managers' index (PMI) came in at 51.6 percent in February, 0.3 percentage points higher than that recorded in January, according to data released Wednesday by the National Bureau of Statistics (NBS). A reading above 50 indicates expansion in the sector while a reading below 50 indicates contraction.

Facing growing risks from explosive growth in debt, China's central bank has cautiously shifted its stance in recent months to a tightening bias after years of super-loose policy to stave off the risk of a hard landing for the world's second-largest economy. This was the largest expansion since May previous year.

Growth in output and new orders both accelerated from January, but were below December's levels, while stocks of finished goods fell again and input prices rose at the slowest pace in four months.

It also marks a 35-month high score.

The Caixin/Markit Manufacturing Purchasing Managers' index (PMI) rose to 51.7, up from 51.0 in January and beating analysts' forecasts of 50.8.

Stronger readings on export orders would build on China's better-than-expected trade numbers in January, but worries of a rise in US trade protectionism are clouding the outlook longer-term.

Manufacturing in India continued to grow in the month of February as PMI manufacturing index stood at 50.7, up from 50.4.

"However, with growth rates well below-par, the sector still has many areas to develop before it can fire on all cylinders", said Pollyanna De Lima, an economist at survey compiler IHS Markit.

A steep rise in commodity prices pushed companies to raise prices charged to consumers at the fastest pace since October 2013.

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