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04 March 2024

China slows as India and South Korea raise factory output

The pace of manufacturing growth in China eased in February. (AP)

By Reuters

Factory activity in Asia's main economies expanded last month, with India and South Korea growing at their fastest pace in around two years although China showed some signs of weakening in its output.

A pair of surveys of purchasing executives showed the pace of manufacturing growth in the world's third biggest economy eased slightly in February, but economists said the recovery trend remained intact.

"Policymakers are driving with low visibility on the Chinese activity data at the moment," said Brian Jackson, a strategist with Royal Bank of Canada in Hong Kong, adding that the timing of the Chinese New Year holidays complicated interpretation of data.

"So it would be premature to conclude that today's fall in the headline PMI numbers show a broader easing in the momentum of China's recovery," said Jackson.

The Purchasing Managers' Index (PMI) derived from a survey conducted by the China Federation of Logistics and Purchasing for the National Bureau of Statistics (NBS) fell to 52.0 in February, well below the median forecast of 55.45 in a Reuters poll and from 55.8 in January. The Australian dollar dipped and copper prices pared their gains after the data, which markets took as a sign Chinese demand for metals and other commodities might be softening. Shanghai stocks, however, climbed in step with other Asian markets.

A separate survey conducted by research firm Markit for HSBC showed the PMI dipping to 55.8 from a record high of 57.4 in January. The PMIs for the euro zone and the United States are due to be released later in the day.

Russia's PMI eased a touch to 50.2 last month, but the index continued to show expansion for the second straight month.

India's PMI rose to 58.5 in February, its strongest reading since June 2008, from 57.7 in January, boosted by expanding output.


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