The manufacturing sector in China moved into contraction territory in March, the latest survey from HSBC Bank showed on Tuesday, with a PMI score of 49.2.
That was well shy of forecasts for 50.5, and it was down sharply from 50.7 in February.
Now at an 11-month low, the index also dipped below the boom-or-bust line of 50 that separates expansion from contraction.
“The HSBC Flash China Manufacturing PMI signaled a slight deterioration in the health of China’s manufacturing sector in March. A renewed fall in total new business contributed to a weaker expansion of output, while companies continued to trim their workforce numbers,” said Markit economist Annabel Fiddes.
Among the individual components of the survey, the output index dipped to 50.8 from 51.7 for a two-month low. Backlogs of work also slowed but continued to expand.
New orders swung to contraction after expanding in February, as did stocks of purchases, stocks of finished goods and quantity of purchases.
New export orders continued to contract, albeit at a slower rate, as did input prices and output prices. Employment contracted at an accelerate pace.
Supplier delivery times lengthened after shortening in the previous month.
“Manufacturing companies continued to benefit from falling input costs, stemming from the recent global oil price decline. However, relatively muted client demand has led firms to pass on savings in a bid to boost new work, and cut their selling prices at a similarly sharp rate,” Fiddes said.
The material has been provided by InstaForex Company – www.instaforex.com