Chinese Manufacturing Activity Sees Second Month of Downturn in February: Reuters Poll
A recent poll conducted by Reuters has revealed that Chinese manufacturing activity has experienced its second consecutive month of decline in February, raising concerns about the country’s economy and global trade. The poll found that 22 out of 30 economists and analysts surveyed predicted a decline in the Purchasing Managers’ Index (PMI) for February, following a similar decline in January.
The PMI, which is widely used to gauge the health of the manufacturing sector, reflects purchasing managers’ opinions on output, orders, inventories, and employment. Any reading above 50 indicates expansion, while a reading below 50 signals contraction.
The expected decline in February’s PMI is attributed to a combination of factors, including ongoing trade tensions with the United States, a global slowdown, and domestic economic challenges. Despite efforts to stabilize the economy, China’s manufacturing sector has struggled to recover, with the PMI recording its lowest reading since May 2019 in January.
"Waning domestic demand, trade frictions, and the ongoing COVID-19 pandemic have all contributed to the recent softening of the manufacturing sector," said Larry Hu, senior economist at Macquarie Group in a statement.
The Reuters poll also revealed that 26% of respondents expect a further decline in the PMI in March, highlighting the ongoing challenges facing China’s manufacturing sector. Furthermore, the poll showed that 38% of respondents believe the Chinese government will implement additional stimulus measures to boost the economy, although the effectiveness of such measures remains uncertain.
The news has sparked concerns about the potential impact on China’s economy and global trade. As the world’s second-largest economy, China plays a significant role in global supply chains, and any downturn in manufacturing activity can have far-reaching consequences.
However, some analysts remain optimistic about China’s ability to rebound. "China’s resilience and ability to adapt to changing circumstances will help the country navigate these challenges and emerge stronger in the long run," said Alicia García-Herrera, economist at Natixis in a statement.
As the world awaits the official PMI release for February, the Reuters poll has raised concerns about the health of China’s manufacturing sector and the potential implications for global trade. While some analysts see challenges ahead, others remain confident in China’s ability to overcome the current hurdles and restore growth.
