SHANGHAI — China’s Purchasing Managers’ Index showed the country’s manufacturing sector grew faster than anticipated in the month of February.
China’s official PMI, which mainly tracks large, state-owned enterprises, edged to 51.6, the highest in three months, according to data released Wednesday by China’s National Bureau of Statistics.
A reading of above 50 indicates growth, while below 50 indicates contraction.
The expansion beat analysts’ projections of 51.1 in a poll by Reuters. The February reading was 0.3 points higher than the previous month, and 2.6 points higher than the corresponding period last year, when manufacturing contracted.
A separate PMI survey from Markit/Caixin, which focuses on small- and mid-size firms, increased to 51.7, compared with 51.0 in January.
Results of 50 and above for both surveys is a positive indicator for China’s economy.
Official data also showed domestic and international demand improved in the month. Shaun Rein, founder of China Market Research Group, said his company is bullish on the country for the first and second quarters.
“We think it’s going to outperform the market. We actually think that there is a good chance there is going to be faster growth in 2017 than last year. Real estate is fairly strong, so you’re seeing huge sales for real estate equipment makers,” he said.
“They had a terrible last couple of years, with too much inventory, but now that inventory has cleared out and they are really going to do well.”
Rein added that retailers should have a good first half, too.
“The Chinese consumer is going to rebound and there is going to be heavier demand within China, especially, for products. They definitely run a risk of trade wars, but I think most analysts are overestimating the risk,” he said.
China analysts have also noted high consumer confidence of late, with workers receiving larger bonuses during the Chinese New Year period.