HSBC China's manufacturing PMI at eight-month low

BEIJING - China's economy which began to soften at the end of last year is showing more signs of a slowdown, with economists arguing that growth in the first quarter might fail to meet the government's annual target of 7.5 percent.

The latest evidence was found in the HSBC's preliminary manufacturing purchasing managers' index (PMI), which was one of the earliest available indicators of the manufacturing sector's operating conditions in China.

Feb manufacturing PMI drops to 50.2

HSBC flash PMI sinks to a 7-month low

The HSBC/Markit China flash manufacturing PMI for March dipped to an eight-month low of 48.1 from a final reading of 48.5 in February, said data company Markit in a statement on Monday.

It meant that manufacturing activity contracted for the third month in a row in March.

According to Markit, data was collected between March 12 and March 20. March's final PMI data will be released on April 1.

PMI above 50 indicates expansion and below 50, contraction.

January saw HSBC China manufacturing PMI dipping to 49.5 from 50.5 in December, the first deterioration of operating conditions in the country's manufacturing sector since July 2013.

In March, almost all sub-indexes fell, including output, new orders, employment, backlogs of work, output prices and stocks of purchases.

New orders fell sharply to 46.9 from 48.6. Output declined to 47.3 from 48.8. In contrast, finished goods inventory rose to 51.2 from 50.1.

The encouraging news came from the sub-index for new export orders, which climbed over the 50-mark for the first time in four months.

Commenting on the figure, HSBC's chief China economist Qu Hongbin said March's flash reading suggested the country's growth momentum continued to slow down, and weakness was broadly-based with domestic demand softening further.