#475. China’s Manufacturing Sector Slowing

China’s Manufacturing Sector Slowing

U.S. manufacturing growth has been solid these past few months, with a first quarter 2014 average Purchasing Managers’ Index (PMI) of 55.4 (readings above 50 indicate expansion). The same cannot be said for all markets.

China’s PMI fell to an eight-month low of 48.1 in March, from February’s 48.5. The index has been below 50 since January, indicating contraction in the sector for this year. And, this is the fifth straight month the index has contracted. China is the world’s second-largest economy, behind the U.S.

Some economists are predicting China’s leaders will have to take steps to boost growth in order to meet this year’s gross domestic product target of 7.5 percent. These economists expect Beijing to loosen monetary policy to keep their economy growing, along with lowering entry barriers for investment and accelerating domestic construction plans.

Next week, we will take a look at some of the possible reasons for China’s slowing economy.