How to read different Chinese PMIs

Via Capital Economics:

• The survey data don’t offer a clear signal on the strength of factory activity last month. The Caixin manufacturing PMI was largely unchanged but the official index dropped sharply. The former is generally the more reliable guide to cyclical trends. But we think it would be a mistake to ignore the sharp drop in the official index entirely, particularly given broader signs in the hard data that growth is slowing.

• Today’s Caixin Manufacturing PMI reading edged up fractionally, from 51.1 in January to 51.6 last month. But its official counterpart (published yesterday) dropped sharply, from 51.3 to 50.3. (See Chart 1.)

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.