China's manufacturing purchasing managers' index (PMI) registered a decline in February, while the non-manufacturing business activity index showed a modest increase, according to official data released on March 4, 2026.

The manufacturing PMI stood at 49.0% in February, down 0.3 percentage points from the previous month, indicating a contraction in the manufacturing sector. The non-manufacturing business activity index reached 49.5%, up 0.1 percentage points from January. The composite PMI output index recorded 49.5%, falling 0.3 percentage points from the previous month.

Manufacturing PMI experienced a downturn during February, with the index falling below the 50-point mark that separates expansion from contraction. Historical data shows that PMI typically experiences fluctuations during the Spring Festival period. This year's extended holiday, which fell entirely in the second half of February, particularly affected business operations and overall market activity in the manufacturing sector.

Both production and demand showed signs of slowing. The production index and new orders index registered 49.6% and 48.6% respectively, declining by 1.0 and 0.6 percentage points from January. Certain sectors including agricultural food processing and computer communication electronics equipment maintained expansion in both production and new orders. However, industries such as textiles and automobiles continued to operate below the threshold, indicating weaker market activity.

Large enterprises demonstrated resilience with their PMI reaching 51.5%, up 1.2 percentage points from the previous month. Medium and small enterprises were more significantly affected by the holiday period, with their PMI readings at 47.5% and 44.8% respectively, declining by 1.2 and 2.6 percentage points.

High-tech manufacturing maintained strong growth momentum with a PMI of 51.5%, significantly outperforming the overall manufacturing average. The consumer goods sector showed improvement with a PMI of 48.8%, up 0.5 percentage points. Equipment manufacturing and high-energy consumption industries recorded PMIs of 49.8% and 47.8% respectively, both showing slight declines.

Business expectations remained positive with the production and operation expectation index at 53.2%, up 0.6 percentage points from January. Companies in general equipment manufacturing and transportation equipment sectors showed particularly optimistic outlooks, with expectation indices above 56.0%.

The non-manufacturing sector showed slight improvement with the business activity index reaching 49.5%. The service industry index rose to 49.7%, up 0.2 percentage points, boosted by holiday consumption in sectors including accommodation, catering, and entertainment. However, capital market services and real estate sectors continued to show weak activity. The service industry business expectation index remained high at 55.8%.

Construction sector activity declined with the business activity index falling to 48.2%, down 0.6 percentage points, affected by workforce reductions during the holiday period. The construction business expectation index returned to expansion territory at 50.9%, up 1.1 percentage points from January.

The composite PMI output index declined to 49.5%, indicating an overall slowdown in business activity compared to the previous month. The index is calculated based on manufacturing production and non-manufacturing business activity indices, which stood at 49.6% and 49.5% respectively.