Chinese manufacturing PMI for February rose 1 full point (approximately 2%) to 50.7.
That number blows through expectations for a print of 50.1.
It’s not all good news though, with the survey showing that while operating conditions improved, with output and new orders higher, exports fell for the first time in 10 months.
No wonder the PBOC wants a weaker Renminbi.
Commenting on the data a Annabel Fiddes, Economist at Markit said:
China’s manufacturing sector saw an improvement in overall operating conditions in February, with companies registering the strongest expansion of output since last summer while total new business also rose at a faster rate. However, the renewed fall in new export orders suggests that foreign demand has weakened, while manufacturers continued to cut their staff numbers (albeit fractionally). Meanwhile, marked reductions in both input and output prices indicated that deflationary pressures persist.
50.7 is a better result than expected. But the data shows the weekend PBOC rate cut is unlikely to be the last in this series of cuts aimed at breathing new life into the Chinese economy.