China's manufacturing sector fell deeper into contraction in March, the latest flash PMI from HSBC and Markit Economics revealed on Monday. The index came in with a seasonally adjusted score of 48.1, touching an eight-month low.
The headline figure is down from 48.5 in February, and it was well shy of forecasts for 48.7 - and it moves the index further below the mark of 50 that separates expansion from contraction.
Among the key components of the survey, the output index sank to 47.3 from 48.8 in the previous month - hitting an 18-month low.
Among other components, new orders, work backlogs, output prices, input prices and quantity of purchases all continued to contract at an accelerating rate.
The components for employment and stocks of purchase also continued to contract, but at a slower rate.
New export orders turned to expansion, while stocks of finished goods accelerated further into expansion. Suppliers' delivery times were shortening at a faster rate.
"The HSBC Flash China Manufacturing PMI reading for March suggests that China's growth momentum continued to slow down. Weakness is broadly-based with domestic demand softening further," said Hongbin Qu, Chief Economist, China and Co- Head of Asian Economic Research at HSBC.
"We expect Beijing to launch a series of policy measures to stabilize growth. Likely options include lowering entry barriers for private investment, targeted spending on subways, air-cleaning and public housing, and guiding lending rates lower."
The HSBC Flash China Manufacturing Purchasing Managers' Index is published on a monthly basis ahead of final PMI data.
The estimate is typically based on approximately 85 to 90 percent of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data.
March final PMI data will be released on April 1.
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