China's manufacturing activity continued to expand in February though at a slower pace, surveys by the government and HSBC showed Monday, with the bank expressing optimism for the coming months.
The HSBC China Manufacturing PMI, or purchasing managers' index, fell to 55.8 last month from 57.4 in January, when the indicator hit its highest level since data were first collected in April 2004.
A separate official PMI published by the China Federation of Logistics and Purchasing (CFLP) on Monday showed manufacturing activity fell to 52.0 last month, from 55.8 in January.
A reading above 50 means the sector is expanding, while a reading below 50 indicates an overall decline.
The readings were likely affected by a factory shutdown for Lunar New Year celebrations, which this year fell in February.
"Despite the moderation in the headline China Manufacturing PMI, growth momentum for China's manufacturing sector remains strong, pointing to a further acceleration in industrial activities in the coming quarters," said the bank's chief China economist Hongbin Qu.
Manufacturing production expanded for the 11th month in a row on the back of sharp gains in new business led by firmer client demand, the HSBC survey showed.
It warned that inflation risks were still "considerable" as average input costs rose for the eighth consecutive month in February.
The CFLP meanwhile cautioned that the slowing of manufacturing activities indicated there were "uncertainties" in the recovery of the overall economy.
"We should closely watch the fallback in the new export order index as well and be prudent about the prospects of export growth," said analyst Zhang Liqun, in a more pessimistic assessment that the one offered by HSBC.
In 2008, manufacturing accounted for more than 40 percent of China's economic output, but has since been hit hard by evaporating demand for its products in key export markets such as the United States and Europe.
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