Caxin PMIs suggest manufacturing contraction undercutting services gains

The privately-run Caixin/Markit Purchasing Managers’ Index fell by 1.2 percentage points to 51.2 in February, inching closer to the line delineating expansion from contraction, Reuters reported. A composite Caixin output index for both manufacturing and services fell below the 50-point mark, suggesting growth in services was being dragged down by manufacturing weakness. The services PMI, which focuses on smaller, private firms, found that the tertiary sector also created jobs at a slower pace in February, posing a greater challenge to Beijing as it seeks to lay off millions from manufacturing to curb overcapacity. A sub-index for new business also fell at its fastest pace in four months.