China’s mfg growth falls to 5-month low

BEIJING (AP) – China’s manufacturing grew at its weakest rate in five months in February as demand faltered and factories shut down for the Lunar New Year holiday, two surveys showed Friday.

An industry group, the China Federation of Logistics and Purchasing, said its purchasing managers index declined to 50.1, down 0.3 points from January, on a 100-point scale on which numbers above 50 show an expansion in activity. A separate index by HSBC Corp. fell to 50.4 from January’s 52.3.

China’s economic growth rebounded to 7.9 percent in the final quarter of last year following its deepest slowdown since the 2008 global crisis. But analysts warn the recovery will be weak and gradual, and growth could be vulnerable if trade or investment weakens.

China’s recovery is continuing but the latest manufacturing indicator “suggests a slower pace of expansion,” HSBC economist Hongbin Qu said in a statement.

The Chinese federation said its measures of new orders and exports declined from January, while HSBC said its measures for both grew weakly.

“Overall the economy is in a period of stabilizing,” said economist Zhang Liqun in statement released by the logistics federation.

Chinese manufacturing is closely watched as an indicator of global consumer sales and potential demand for trading partners that supply its factories with raw materials and industrial components.

Economists are cautious about drawing conclusions about China’s economy from trade and other data in January and February, due to the lengthy Lunar New Year holiday. It begins on different days in those two months each year, distorting business activity.

This year, the holiday shutdown for Chinese companies fell entirely in February.