The official manufacturing PMI, a key survey gauging the health of China’s industrial sector, gave further ground in February pointing to a sustained drag from weaker demand.
The index dropped from 49.5 to 49.2 last month, the weakest in three years, and falling short of the Bloomberg median which predicted no change. The output sub-index was particularly week in February, dropping below the 50 marker indicating contraction. Export new orders also continued to slide.
The official non-manufacturing PMI also fell, from 54.7 to 54.3, on the back of slower construction activity.
“The official PMIs suggest that growth remains under pressure and we expect conditions to weaken further in the coming months,” wrote Julian Evans-Pritchard, China economist at Capital Economics, in a note.
“While there are tentative signs that credit growth is now starting to bottom out, we don’t think that will put a floor beneath growth until the middle of this year at the earliest.”