According to a preliminary business survey by HSBC, In February, new export orders in China declined to their biggest level in eight months. The decline in new export orders has defied expectations that the 2nd largest economy in the world will pick up momentum after the holidays of Lunar New Year and it is a new sign of worry about the European debt crisis and its impact on other countries.
Many of the analysts were expecting rebound in this month, after both imports and exports dropped the most last month, after factories weren’t operating in China because of the Lunar New Year holidays.
However, February flash PMI of HSBC, which shows the overall manufacturing sector decline for the 4th consecutive month, suggests international demand was declining even more as compared to local demand.
The flash PMI of HSBC is the earliest indicator of industrial activity in the 2nd largest economy in the world. The PMI increased to a 4 month high in February, reaching a level of 49.7 from a previous 48.8 attained in January. For the most of the past eight months, the PMI has been below the value of 50, which delimits expansion from contraction.
HSBC’s findings reveal that new export orders sub index declined to 47.4, which is their lowest level in 8 months, from January, in which they were about 50.4, as the debt crisis in the European region casted a shadow for Chinese exports. Moreover, new orders also remained flat, at a level of 49.1, which shows they were declining and the output sub index increased to 50.1 this month, from a previous 47.6 attained in January.
However, the final PMI of HSBC will go under supervision and the revised results will be released on March 1st.
