Beijing--China's manufacturing activity in February improved more than initially thought, HSBC said Monday, but weakening foreign demand and declining prices signalled the world's second-largest economy still faces multiple woes.
The British bank's final purchasing managers' index (PMI) for the month came in at 50.7, up from its preliminary reading of 50.1 and the highest since July's 51.7, the firm said in a statement.
PMI readings above 50 point to expansion, while anything below suggests contraction.
The index, compiled by information services provider Markit, tracks activity in China's factories and workshops and is a closely watched indicator of the health of the Asian economic giant.
Annabel Fiddes, an economist at Markit, said the improvement was mainly underpinned by the strongest expansion of output since last summer.
"However, the renewed fall in new export orders suggests that foreign demand has weakened, while manufacturers continued to cut their staff numbers (albeit fractionally)," she said in the statement, adding dropping input and output prices pointed to persisting deflationary pressures.
The National Bureau of Statistics on Sunday said China's official PMI showed contraction for the second straight month in February, coming in at 49.9, a marginal improvement from January's 49.8.
The two surveys often differ to some degree. Analysts have said HSBC's survey is more weighted towards small exporters while the official one looks to larger companies.
AFP
