Market sentiment during the Asian session received a large boost after China’s National Bureau of Statistics PMIs showed a massive jump for manufacturing and non-manufacturing today.
Looking at Asian stocks and Hong Kong stocks have surged, the Hang Seng is up around 3% on the day, while on mainland China the Shanghai Composite is up around 0.8%.
Breaking down the data, the official NBS Manufacturing PMI increased to 52.6 in February of 2023 from 50.1 in the previous month, exceeding market estimates of 50.5.
This was the second straight month of expansion in factory activity and the fastest pace since March 2012, buoyed by Beijing’s recent decision to exit from a zero-COVID policy.
Both new orders (54.1 vs 50.9 in January) and buying levels (53.5 vs 50.4) grew for the second straight month, and at steeper paces.
Also, output, export sales, and employment all returned to growth. At the same time, delivery time improved for the first time in 7 months (52.0 vs 47.6). On the price front, input cost rose for the sixth month in a row and at the fastest pace since last May, while output charges rose for the first time in 10 months. Business sentiment also strengthened to a 12-month high.
The official NBS Non-Manufacturing PMI for China also increased to 56.3 in February 2023 from 54.4 a month earlier, pointing to the highest reading since March 2021, boosted by the removal of a zero-COVID policy.
The latest result also marked the second straight month of expansion in the service sector, as new orders expanded for the second successive month and at a faster rate (55.8 vs 52.5 in January), while both foreign sales (51.9 vs 45.9) and employment (50.2 vs 46.7) rose after months of contraction.
Meanwhile, delivery time notably improved, as mobility and logistics returned to normal across the mainland as COVID-19 restriction were obviously completely lifted.
On inflation, input cost slowed slightly while output prices went up for the first time in eleven months. Lastly, sentiment remained upbeat, with the reading staying at a high level.
