China Factory Output Falls At The Fastest Rate Ever In History In February

Factory activity in China shrunk at the fastest pace on record in February from the previous month, clearly highlighting the adverse effects of coronavirus outbreak on its economy. The country's official Purchasing Managers' Index (PMI) fell to a record low of 35.7 in February from 50.0 in January, as per data released by the National Bureau of Statistics on Saturday.

The PMI data is the first official indicator of the effects on the economy since the outbreak of the deadly virus that has killed nearly 3,000 and infected around 80,000 people.

The epidemic has been a serious roadblock for the Chinese economy that was just recovering from the effects of the trade war. Tough public health measures to limit the spread of the virus closed factories and transportation lines for days.

A sub-index of manufacturing production plunged to 27.8 in February from January's 51.3 while a reading of new orders nosedived to 29.3 from 51.4 a month earlier.

Chinese leaders have been urging local governments, factories and workers to re-start operations as soon as possible in less-affected regions. However, recovery has been slow and many migrant workers are yet to return to work due to stringent quarantine rules and ongoing travel bans.

Official data showed that only about 30 percent of China's small and medium-sized companies, that contribute to over 50 percent of the country's GDP, had resumed production as of Wednesday. Some of the firms that have restarted work are reportedly running below normal capacity.