2013-03-01 09:36:41 Forex News – China factory growth stalls
March 1, 2013 9:36 am
Growth in China appears to have steadied in February, as a manufacturing survey gave a lower reading than expected, but not enough to stir markets. The official purchasing managers’ index (PMI) recorded a dip to 50.1, slightly below a 50.2 forecast and down from the 50.4 reading in January. This figure is still above the 50 point level which demarcates an expansion from contraction.
Contributing the sluggish factory growth is a cooling in domestic demand due to firms being hit by a slack in foreign sales as China’s trading partners face a slow economic recovery themselves.
However the fact that the PMI remains in the contraction phase does not signal China’s economy is slipping into another slowdown, so this is seen as a positive. Markets did not react negatively to the data and even the Australian dollar remained steady. China is a major trading partner for Australia so any negative news for there usually affects the aussie.
Meanwhile a second manufacturing survey from the HSBC also showed a drop in PMI for February to 50.4 after seasonal adjustments from January’s two-year high of 52.3. This was more or less in line with a flash reading.
Growth in China appears to have steadied in February, as a manufacturing survey gave a lower reading than expected, but not enough to stir markets. The official purchasing managers’ index (PMI) recorded a dip to 50.1, slightly below a 50.2 forecast and down from the 50.4 reading in January. This figure is still above the 50 point level which demarcates an expansion from contraction.
Contributing the sluggish factory growth is a cooling in domestic demand due to firms being hit by a slack in foreign sales as China’s trading partners face a slow economic recovery themselves.
However the fact that the PMI remains in the contraction phase does not signal China’s economy is slipping into another slowdown, so this is seen as a positive. Markets did not react negatively to the data and even the Australian dollar remained steady. China is a major trading partner for Australia so any negative news for there usually affects the aussie.
Meanwhile a second manufacturing survey from the HSBC also showed a drop in PMI for February to 50.4 after seasonal adjustments from January’s two-year high of 52.3. This was more or less in line with a flash reading.
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