PMI continues to weaken

The unexpected weakening of both official and non-official Purchasing Managers' Index (PMI) shows the economy may continue to be bogged down in difficulties, as global and domestic demand remain sluggish.

The official manufacturing PMI edged down to 50.2 in February from 50.5 in January, the National Bureau of Statistics said on Saturday.

Meanwhile, the final Markit/HSBC manufacturing PMI fell to a seven-month low of 48.5 in the same month, the third straight monthly decline, compared with 49.5 in January.

A PMI reading above 50 indicates activity expansion while one below that level points to a contraction.

Despite their difference in reading, the two indexes show a similar downside trend, indicating the fundamentals are yet to improve.

The economy has remained weak since the last quarter of last year. The February PMI figures show that the weakening trend has continued. Out of the 12 sub-indexes of the official PMI, in particular, nine, including such key sub-indexes as new orders and new export orders, registered a fall.

Since those figures are seasonally adjusted, the factor of the Lunar New Year has been eliminated, indicating a real risk of economic downturn if policymakers fail to take effective measures.

Zhang Liqun, economist at the Development Research Centre, which helps compile the official PMI, said: "We should fully consider possible risk factors and further improve macroeconomic policy reserves" to keep economic growth steady.

Policymakers, however, do not have many cards to play as they make efforts to restructure the economy, a task that will help improve the quality and efficiency of the economy but is set to drag on its growth rate.