BEIJING: China’s factory activity contracted for a second straight month in February, with the official manufacturing purchasing managers’ index (PMI) slipping to 49.0 from 49.3 in January, according to National Bureau of Statistics data released on March 4. A reading below 50 indicates contraction. The bureau said holiday-related disruptions around the Spring Festival affected production schedules and business operations, with weaker results concentrated among smaller firms even as some larger manufacturers reported expansion.
The manufacturing breakdown showed broad softening. The production sub-index fell to 49.6 in February from 50.6 in January, while the new orders sub-index declined to 48.6 from 49.2. New export orders dropped to 45.0 from 47.8, remaining well below the 50 threshold. The employment index registered 48.0, and the supplier delivery time index came in at 49.1, reflecting slower deliveries compared with the prior month.
By company size, the PMI for large enterprises rose to 51.5 in February, up 1.2 points from January and back above the 50 line. Medium-sized enterprises recorded a PMI of 47.5, down 1.2 points, and small enterprises posted 44.8, down 2.6 points. The statistics bureau attributed the sharper pullback among medium and smaller firms to more pronounced holiday disruptions, including pauses in production and staffing changes during the festival period.
Services and construction
Outside factories, the official non-manufacturing PMI edged up to 49.5 in February from 49.4 in January, remaining in contraction. Within that measure, the services business activity index rose to 49.7 from 49.5, while the construction business activity index fell to 48.2, down 0.6 points. The bureau said some construction projects were suspended as workers returned home for the Spring Festival, weighing on activity in the sector.
The bureau reported stronger holiday-related activity in parts of the services economy. Industries including accommodation, catering, culture, sports and entertainment all recorded readings above 60 in February, indicating robust activity levels during the period. Other segments, including capital market services and real estate, registered lower index readings. The service sector business expectation index stood at 55.8, while the construction business expectation index rose to 50.9, reflecting respondents’ views of near-term conditions.
Private gauge and composite
A broader official composite PMI output index, combining manufacturing and non-manufacturing activity, fell to 49.5 in February from 49.8 in January, keeping overall output below the expansion threshold. Separately, a private-sector manufacturing PMI compiled by S&P Global rose to 52.1 in February from 50.3 in January, and its services PMI climbed to 56.7 from 52.3; S&P Global’s private composite output index increased to 55.4 from 51.6, based on surveys of companies across manufacturing and services.
The official PMI series is produced from monthly surveys of purchasing managers, with 50 marking the line between expansion and contraction across the diffusion indexes. The National Bureau of Statistics said February’s results reflected the timing of the Spring Festival holiday, which can affect factory operations, transport and staffing patterns during the survey period, alongside differences in performance by firm size and sector. The February readings followed January’s declines and remained below 50 across the headline official manufacturing and non-manufacturing measures – By Content Syndication Services.