China's factory surge marginally declines in February

China's factory surge marginally declines in February

In February, China's manufacturing sector reported another month of relatively firm surge notwithstanding long Lunar New Year holidays as well as a tough pollution clampdown that affected factory operations.

The official manufacturing Purchasing Managers' Index is supposed to have dived a bit to 51.2 this month versus January's outcome of 51.3. That’s what a median poll of 29 market experts revealed in a Reuters survey.

For Chinese manufacturers it would mark the 19th expanding month, backing views that the world's number two economy will only face a moderate slowdown in surge in 2018. The 50-mark actually separates contraction from expansion on a monthly basis.

However, just like much of China's earlier data, the trends might be affected by the timing of the week-long Lunar New Year holidays that burst out in February 2018.

Many offices and factories start scaling back operations prior to shutting for the whole holiday or even longer, but some manufacturers have shipments front-loaded or replenish their inventories before the break.

Some China’s steel mills are supposed to be actively building up inventories of raw stuff, including iron ore so they could spring back to full output once winter smog limits are removed in the nearer future.

Considering intact external demand, mild inflation as well as steady labor costs many market experts are assured that the Asian country’s manufacturing sector will still demonstrate a good health in 2018.  

For the first three quarters 2017 the corporate lending rate tacked on 49 basis points hitting 5.76% prior to sagging 2 basis points during the period of September-December.

Financial experts expect a private poll on the country’s factory activity this week to demonstrate a similar descending trend as the official outcome, right after January’s activity extended at multi-month maximums.

The private Caixin manufacturing PMI is going to be uncovered on March 1, while the Caixin services PMI will emerge on March 5.

 

 

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