China’s manufacturing has, so far this month, slowed perceptibly amid sluggish global and domestic demand, according to a key indicator culled from survey data.
A preliminary look at HSBC’s Flash China Manufacturing Purchasing Managers’ Index for March based on approximately 85-90 percent of survey responses from that sector was at 48.1 as of Thursday out of a 100-point scale, down from February’s 49.6.
“Growth remains on track of slowdown, despite the marginal improvement in the headline flash PMI led by quickened production after the Chinese New Year,” said Hongbin Qu, chief economist, China, at HSBC in a statement.
“With a meaningful rebound of domestic demand not in sight, external weakness is starting to bite, adding more downside risks to growth” that Qu said “should step up policy easing as inflation pressures continue to ease.”
Global markets responded negatively to the latest news out of China, including in the U.S., where the Dow Jones industrial average fell 66 points to 13,058 today. The Standard & Poor's 500 index fell nine points to 1,393, and the NASDAQ slid 11 points to 3,063.
A PMI indicator below 50 equates to contraction from the previous month, as anything above that mark indicates growth.
The March Flash PMI for China would mark the fifth straight month that index has been below 50, although leading economists have reportedly said the Asian giant’s slower growth is a reflection of China's longer-term goal of re-balancing exports with domestic demand.