Activity in China’s factory sector contracted for a second straight month in February on unsteady exports and slowing investment, an official survey showed on Sunday, reinforcing bets that more policy loosening is needed to lift the economy.
The official Purchasing Managers’ Index (PMI) inched up to 49.9 in February from January’s 49.8, a whisker below the 50-point level that separates growth from contraction on a monthly basis.
Analysts polled by Reuters had forecast a weaker reading of 49.7. A separate official services PMI, also released on Sunday, showed growth in the sector accelerated to 53.9, up from 53.7 in January. Accounting for 48 percent of China’s $10.2 trillion economy last year, the services sector has weathered the growth downturn better than factories, partly because it depends less on foreign demand.
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