The HSBC Flash China Manufacturing Purchasing Managers’ Index has dipped to a seven-month low in February, promoting concerns that the country’s underlying momentum for manufacturing growth is continuing to weaken after similarly disappointing figures in January.

The February indicator came in at 48.3, down from an unexpectedly low 49.5 in January, HSBC said Thursday. December’s final reading was 50.5. An index reading below 50 indicates factory production is contracting rather than expanding. The HSBC flash PMI is based on a survey of more than 420 manufacturers in China and is widely considered an accurate marker of manufacturing trends.

“February’s flash reading of the HSBC China Manufacturing PMI moderated further as new orders and production contracted, reflecting the renewed destocking activities,” said Hongbin Qu, chief economist for China and co-head of Asian Economic Research at HSBC. “The building-up of disinflationary pressures implies that the underlying momentum for manufacturing growth could be weakening. We believe Beijing policy makers should and can fine-tune policy to keep growth at a steady pace in the coming year.”

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