An unusually long Lunar New Year holiday helped ease China’s manufacturing PMI in February, even as business confidence improved and certain industries demonstrated optimism.
Data released by the National Bureau of Statistics (NBS) showed that the manufacturing purchasing managers’ index (PMI) fell just short of an economists’ forecast of 49.1 for February, coming in at 49, reports China Daily. Readings range between 0 and 100, with those over 50 indicating expansion while levels under 50 indicate contraction.
It marks the second consecutive month of contraction after a brief rebound in December. Composite PMI (manufacturing and services) fell to 49.5 from 49.8 in January, while non-manufacturing PMI (services and construction) edged 0.1 percentage point to 49.5.
Chief NBS statistician Huo Lihui attributed the level drop to the Lunar New Year break, its record length and timing contributing to a slight overall decline in manufacturing activity.
A deeper look into industry subindices reveals that certain industries remained in expansion territory. Agricultural and sideline food processing, as well as computer, communication and electronic equipment, stayed above 50. High-tech manufacturing also outperformed manufacturing overall, standing at 51.5 for February.
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Large enterprises hit a PMI of 51.5 in February, up 1.2 percentage points month-on-month, reflecting steady production and business expansion among major manufacturers. Small and medium-sized enterprises had more difficulty weathering holiday disruptions, down 2.6 and 1.2 percentage points from January, respectively.
Consumer goods added 0.5 percentage points month-on-month to hit 48.8, suggesting some improvement, even as PMIs for equipment manufacturing and energy-intensive industries cooled slightly to 49.8 (-0.3) and 47.8 (-0.1), respectively.
Still, manufacturing enterprises show increased optimism about market prospects after the holiday dip, with the sub-index for production and business expectations climbing 0.6 percentage points to 53.2 in February.
Certain industries, including general equipment and railway, shipping and aerospace equipment, reported expectation indices over 56, indicating strong optimism about their near-term industrial outlook.
