Chinese Manufacturing PMI Slumps To 8-Month Low, Services PMI To 3-Month High; Goldman Admits Growth Decelerating

Tyler Durden's picture

UPDATE:*CHINA HSBC MANUFACTURING PMI AT 48.5 FOR FEB. (as expected and marginally above the Flash print)

Chinese manufacturing PMI fell to an 8-month low holding barely above the crucial 50 level yesterday forcing Goldman to admit that "this signals further deceleration" in Chinese growth. All sub-indices showed signs of cyclical slowdown from January to February with perhaps the two most-critical ones - production and new orders - showing considerably larger falls than the headline index itself as we await this evening's HSBC print to confirm an average 'contraction'. China's Services PMI just printed at 55, up from 53.4, to a 3-month high led by a surge in the "expectations" sub-index.

China Services PMI rose to 3-month highs... as new orders rose but the "expectations" sub-index jumped the most as hope trumps any current weakness as input prices slumped to 10 month lows.


China Manufacturing PMI fell to 8-month lows

Ahead of this evening's HSBC-version (which printed 48.3 Flash) of Manufacturing data, Goldman's summary is oddly (honest) pessimistic on China's Manufacturing industry...

The latest PMI data is another piece of evidence of slowing activity growth since 4Q 2013. Data at the start of the year tends to be noisy in general, and unlike some other indicators taking the average of January and February PMI readings doesn't necessarily override the Chinese New Year distortions (this is because survey results can be affected by the timing of the survey which covers only a short period over several days within the month). However, the consistency of the signal is such that there is little doubt that growth has been weak and probably becoming weaker since the end of the year. We see risks to our 7.7% GDP forecast for 1Q tilted more towards the downside.


We believe the combination of a tight monetary policy stance, heightened anti-corruption and anti-pollution campaign, inventory destocking and slower than expected external demand contributed to the slowdown. While over the longer term measures such as anti-corruption measures can improve the efficiency of the economy, they can often put significant downward pressures on demand growth in the short term.

Of course, there's always hope when things get ugly...

The top leadership has shown clear willingness to maintain broad growth stability in the latest politburo meeting, though at the moment there is no information on detailed policy measures.

In other words, bad news is great news (or keep BTFATHing in US stocks because the PBOC will rescue any and all growth slowdowns) - or will they...

Bank of America has some more confidence that it will all be ok in the end...

We suggest investors not read too much into the PMI "slowdown" in February. Instead, markets should focus on yoy activity data for the combined January and February period to be released in the next two weeks. It's our high conviction call that the official PMI will rebound back to around 50.5 in March.

So blame seasonality (that happens every year!?) and a belief that a central planner who has abrogated currency weakness (to tame carry trader exploitation) and liquidty squeezes (to tame risk appetite in high-yield shadow bank vehicles) will 'stimulate' once again (and pump up the real estate bubble once again) to meet the "hope" that is priced into markets.

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knukles's picture

Some dickwad on the Oscars just said "What a great country we are; we went to the moon twice, got bored and never went back."

And you all think China's decelerating

medium giraffe's picture

480,000 mile round trip in a tin can bristling with 1960's technology via the Van Allen belts, to visit an object with such an enourmously contrasting temperature range that you would have to have a gigantic cooling system to deal with the problelm of dumping heat during the 253 F 'daytime' temperatures without the advantage of convection due to lack of atmosphere.  Twice....


No, they're not very bright, are they?

NoDebt's picture

And a lot of the engineering calculations done with a slide rule.  The Saturn V program was the only rocket program to never suffer a catastrophic failure on mission.  The stuff they carried into space on their nose... well, it got a little more hairy.

jbvtme's picture

TD...can you post some oscar news?

Rising Sun's picture

go to


that help?

Luckhasit's picture

Heh, thanks. We all needed that.

BandGap's picture

I have never watched the Oscars. The collective IQ of that little gathering is on par with most school's Special Education enrollees, with half the charm.


knukles's picture

Mrs K has been home sick as a dog for a week now with the flu and I can hear it in the background.  She's not in a very good mood...

And in any case, I disappear in 15 minutes for the next installment of True Detective.
Great shit!

Butchukno, it is amazing what you can learn just by listening. 

Butchukno is not a village in "The Ukraine", by the way...

Robot Traders Mom's picture

Hopefully Ukraine will distract us from all the economic problems!

Grande Tetons's picture

A red cape is a matador's best friend. 

lolmao500's picture

BUILD MORE AIRCRAFT CARRIERS, TANKS, AK-47S, ARTILLERY, MISSILES, PLANES, SUBS!! There. Keynes and Krugman solved your problem.

stant's picture

I want them to bring the trillion $ coin back

disabledvet's picture

how would like your "trillion dollar coin"?

no to gold. no to silver.
we could probably do it copper however.
it would be a HUGE coin...and we do charge for shipping!
Probably gonna permits too cuz that coin is gonna be REAL heavy.

Hopefully you know the "mill operator" too because casting a coin that big (it will have to cast i'm afraid...we cannot "mint" a single coin that big) will require "special processes."

as you can see "this idea has been broached" however.
my question to you is therefore "do you have a trillion dollars?"

NoDebt's picture

Copper?  I live in an old house with a well and copper plumbing.  Bring that coin on by and I'll hose it down and dissolve it for you.

<Best damned home-schooled copper pipe surgeon in town>

Hindenburg...Oh Man's picture

Bullish. I'm going all in on the dip at the open tomorrow. New all time highs by noon.

Dimons jock's picture

Fuck yeah, PCLN , fb, tsla, except apple because they don't innovate just make money & wall st thinks that's boring

Atomizer's picture

How will this play out with Zimbabwe and African rare metal investment programs?  

Son of Loki's picture

Check out where your clothes are now made: about 30% Bangladesh, Honduras, Indonesia, Vietnam, Cambodia and even the tiny island of Mauritius.

Companies are now moving on to cheaper labor. Soon, we may see, "Hecho en Detroit" ?!

Notarocketscientist's picture

The Chinese manufacturing index is ----------- Manufactured.


It works this way:


- if the number approaches or drops below 50, the PBOC prints another trillion and flings it into the markets

- the money is used to build more ghost towns

- that results in a PMI above the danger zone signalling 'all is well'

- rinse repeat until the financial system collapses.

Rising Sun's picture

China crashing.  That's a shame.