China Manufacturing Output Decreases

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Mar. 2 – China’s manufacturing output decreased in February, with the benchmark Purchasing Managers’ Index (PMI) slipping for the first time in more than four years, to 52 from 55.5 the previous month.

The PMI is compiled by China’s National Bureau of Statistics with numbers above 50 indicating growth and figures below 50 suggesting contraction.

Some analysts believe the decline is temporary and attribute the dip to the Chinese New Year holiday falling on the middle of February. This sentiment, however, does not explain why the index had not slowed during the Chinese New Year in each of the past four years.

Blame has also been placed on higher international commodity prices, manufacturing overcapacity, wage pressures, inflation, and restrained government spending – suggesting the slowdown may not be purely attributable to the holidays.

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