China’s manufacturing sector experienced a slight contraction in February, with the Purchasing Managers’ Index (PMI) dipping to 49.1 from January’s 49.2, according to data released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing on Friday. Despite falling below the 50-point threshold that separates growth from contraction, the figures align with typical seasonal patterns attributed to the Chinese New Year holiday.
Bruce Pang, chief economist and head of research at JLL Greater China, explained that the lower PMI figures were influenced by holiday factors and should not be viewed as a sign of weakening economic fundamentals. “The latest manufacturing PMI figures aligned with historical characteristics typically attributed to the Chinese New Year holiday and other seasonal factors,” Pang told CGTN.
In contrast, the non-manufacturing PMI, which measures activity in the services and construction sectors, rose for the third consecutive month to 51.4, up 0.7 percentage points from the previous month. This indicates continued expansion and resilience in China’s service-oriented industries.
Holiday-driven industries showed significant growth during this period. The business activity indexes for retail, rail and road transportation, and catering all surpassed 53. Air transportation, monetary and financial services, and entertainment sectors experienced rapid growth, with activity indexes exceeding 60 points.
The construction industry also demonstrated robust performance. Both the business activity index and the new order index rebounded to above 60, signaling accelerated growth and heightened demand for infrastructure investment. Additionally, the financial industry’s business activity index rose above 60, with the banking sector performing particularly well. January’s social financing data suggests that financial support for the real economy continues to grow.
Meanwhile, Caixin’s manufacturing PMI, which focuses more on small and medium-sized enterprises and private companies, edged up to 50.9 in February, marking a 0.1-point increase from the previous month. According to a Caixin press release, this is the best PMI reading recorded since August 2023 and indicates that business conditions have strengthened over the past four months.
“It was the first time that the private PMI data has stayed in the expansion range for four straight months since the second half of 2021, indicating an overall economic recovery of the country,” said Wang Zhe, senior economist at Caixin Insight Group.
Reference(s):
China's manufacturing PMI slightly down in February on holiday factors
cgtn.com
