Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s Purchasing Manager’s Index (PMI) dropped to 50.6 in February from 51.3 in January, depicting slowing of its factory activity. This is the lowest PMI in nine months, after the country recorded 50.7 in May 2020. Factory activity in the country usually subsides in February due to the Lunar New Year break as workers return to their home towns.


The PMI sub-index for new export orders was 48.8 in February compared to 50.2 in January. The sub-index for employment was 48.1 in February compared to 48.4 in the previous month. 


According to Wang Zhe, a senior economist at Caixin Insight Group, export orders contracted and factories in China have laid-off employees for three consecutive months. Zhe added that overall demand was dragged down by global demand. Large and state-owned manufacturers also highlighted a fallout in domestic production because of the recent spurt in COVID-19 infections.


China’s economic growth in 2020 was 2.3pc. For 2021, the government may avoid setting a growth target to prevent provincial economies from feeling pressured to take on more debt to enhance growth.


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