(Bloomberg) --
A gauge of growth momentum in China’s high-tech industries slumped to a record low in February as the impact of the coronavirus bit, prompting Nomura Holdings Inc. to cut its estimate for the official manufacturing gauge.
The Emerging Industries Purchasing Managers’ index plunged 20.2 percentage points to 29.9 this month, according to a research firm connected to the Federation of Logistics & Purchasing. That’s the lowest since the introduction of the series in January 2014, Nomura said in a research note. Its close correlation with the official manufacturing purchasing managers’ index prompted Nomura to cut its February forecast for that gauge from close to 40 to as low as 30, chief China economist Lu Ting in Hong Kong said.
The slump in the high-tech industries gauge reflected the “devastating impact” of the Covid-19 epidemic after cities were locked down to prevent the virus spreading and because of a very slow return to work for the nation after the Lunar New Year holidays, Nomura said. A slower-than-expected resumption of business prompted Nomura’s Lu to cut his first quarter growth forecast to just 3%.
The Emerging Industries PMI is not seasonally adjusted and its average reading in January and February last year was 40, compared to an average of 56.2 for all of 2019, Nomura said.
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