A gauge of Chinese factory activity inched up to a seven-month high but there was not much room for cheer as export orders shrank and deflationary pressures persisted, according to a private survey sponsored by HSBC.
The final HSBC/Markit Purchasing Managers’ Index (PMI) for February stood at 50.7, up from 49.7 in January and compared with a preliminary reading of 50.1, as overall new orders picked up, Reuters reported on Monday.
However, the survey showed that manufacturers were struggling to cope with erratic exports and deflationary pressures, the report said.
The new export orders sub-index dipped to 48.5 in February, the sharpest contraction in a year, while both input and output prices fell for a seventh month.
Manufacturing employment contracted for a 16th month, although the pace of job shedding moderated in February.
“China’s manufacturing sector saw an improvement in overall operating conditions in February, with companies registering the strongest expansion of output since last summer while total new business also rose at a faster rate,” Annabel Fiddes, an economist at Markit, was quoted as saying.
“However, the renewed fall in new export orders suggests that foreign demand has weakened, while manufacturers continued to cut their staff numbers (albeit fractionally).”
An official survey released on Sunday showed China’s factory sector contracted for a second straight month in February on unsteady exports and slowing investment.
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