China's Factory Activity Shrinks For 5th Month

China's manufacturing activity in February contracted for a fifth straight month, an official factory survey showed, raising pressure on policymakers to roll out further stimulus measures as factory owners struggle for orders, Ellen Zhang and Jose Cash reported for Reuters.

The official manufacturing purchasing managers' index (PMI), compiled by the National Bureau of Statistics (NBS), fell to 49.1 in February from 49.2 in January. I Photo: Steve Jurvetson Wikimedia Commons

The official manufacturing purchasing managers' index (PMI), compiled by the National Bureau of Statistics (NBS), fell to 49.1 in February from 49.2 in January, below the 50-mark separating growth from contraction and in line with a median forecast of 49.1 in a Reuters poll.

Seasonal factors may have affected the figure, as the Lunar New Year (LNY) fell on February 10 this year and saw factories shut as workers returned home for the holiday.

However, a survey by the Caixin/S&P Global released just after the official PMI showed manufacturing activity expanded steadily as both production and new orders grew faster.

Taken together, the PMIs highlighted an uneven economic recovery.

"Lunar New Year definitely played an important role. Usually, that's the month when you see a PMI dip," said Dan Wang, chief economist at Hang Seng Bank China. Wang said the dip in the official PMI was also due to a sharp contraction of new foreign orders.

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