China manufacturing plunges in February amid virus controls

BEIJING (AP) — China’s manufacturing plunged in February by an even wider margin than expected after efforts to contain a virus outbreak shut down much of the world’s second-largest economy, an official surveyed showed Saturday.

The survey, coming as global stock markets fall on fears the virus will spread abroad, adds to mounting evidence of the vast cost of the disease that emerged in central China in December and its economic impact worldwide.

The monthly purchasing managers’ index issued by the Chinese statistics agency and an industry group fell to 35.7 from January’s 50 on a 100-point scale on which numbers below 50 indicate activity contracting.

A sub-measure of imports plummeted, highlighting the shock waves spreading through China’s Asian neighbors and other suppliers of components and raw materials to its factories, which assemble most of the world's smartphones, toys, home appliances and other consumer goods.

"Supply chains are likely to remain disrupted even if China's factories go back to full production,” due to spreading travel bans and other anti-virus controls abroad, said Iris Pang of ING in a report. She said it was “incredibly unlikely” the global flow of goods would recover even in April.

The PMI decline was widely anticipated after the government extended the Lunar New Year holiday to keep factories and offices closed but the figure was even more severe than many forecasters expected. Many analysts expected a result in the low 40s, which already would have been the lowest since the PMI first was issued in 2002.

Stock markets in the United States, Europe and Japan tumbled by about 10% over the past week after outbreaks in South Korea, Iran and Italy. Oil prices have sunk on expectations manufacturing worldwide might decline.

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