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Manufacturing PMI contracts in Feb due to epidemic: NBS

By Zhou Lanxu | chinadaily.com.cn | Updated: 2020-02-29 11:06
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China's official purchasing managers index (PMI) for the manufacturing sector dropped to a record low in February, as the novel coronavirus outbreak led to a temporary economic contraction.

The manufacturing PMI plunged to 35.7 last month, versus 50.0 in January and the previous record low of 38.8 in November 2008 amid the global financial crisis, according to the National Bureau of Statistics on Saturday.

A reading above 50 indicates expansion, while a reading below reflects contraction.

Fixed sub-indexes all retreated into contraction territory as the epidemic disrupted normal business activities, with the gauges of production and new orders mostly hit, the bureau said.

But the impact should be temporary and the index is expected to recover this month as work resumes, Zhao Qinghe, a NBS senior statistician, said in a note.

"The epidemic has been preliminarily curbed. The negative impact on production is waning, with the rate of work resumption picking up quickly and market confidence recovering steadily," Zhao said.

The NBS survey showed 78.9 percent of large and medium-sized enterprises had resumed work as of Feb 25, and the proportion should rise to 90.8 by the end of March, according to Zhao.

China's nonmanufacturing PMI was slashed from 54.1 for the previous month to 29.6 in February, sending last month's composite PMI, which covers manufacturing and nonmanufacturing activities, to 28.9, versus 53.0 in January.

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