Data released on March 4 by the National Bureau of Statistics Service Industry Survey Center and the China Federation of Logistics & Purchasing showed that in February, the Manufacturing Purchasing Managers' Index (PMI) stood at 49.0%, down 0.3 percentage points from the previous month. The Non-Manufacturing Business Activity Index was 49.5%, up 0.1 percentage points from January.
Regarding the decline in the manufacturing PMI, Huo Lihui, Chief Statistician at the NBS Service Industry Survey Center, explained that historical data indicates PMI often experiences some fluctuation during the month containing the Spring Festival holiday. This year, the holiday period was extended and concentrated in mid-to-late February, which impacted business production and operations, leading to an overall decrease in manufacturing market activity. However, the overall sentiment level for non-manufacturing industries showed a slight improvement.
The slight rebound in the non-manufacturing index this month was primarily influenced by seasonal factors related to the Spring Festival holiday. The core driver was the strong performance of the service sector, which offset the downward pressure from the construction industry's holiday shutdowns. This resulted in a structural characteristic of "services providing support while construction bottoms out." Although the current index remains slightly below the 50-point threshold separating expansion from contraction, the Business Activity Expectation Index continues to operate in a high range around 55%. In particular, expectations for the civil engineering and construction sector improved significantly, indicating a gradual accumulation of endogenous market momentum.
A notable highlight in this month's data was the rebound in the Service Industry Business Activity Index. NBS data showed the index reached 49.7% in February, an increase of 0.2 percentage points from January. Driven by the Spring Festival holiday effect, resident travel and consumer demand were concentratedly released, leading to faster growth in business volume for service industries related to household consumption. Among these, the business activity indices for accommodation, catering, culture, sports, and entertainment all remained in high expansionary territory above 60%. The indices for retail and air transport also rose to above 52%.
The recovery in service sector sentiment was propelled by two main factors. On one hand, the consumption boom driven by the holiday effect served as a direct catalyst, with concentrated releases of demand for travel, shopping, and cultural entertainment significantly boosting sentiment in accommodation, catering, and cultural tourism-related industries. On the other hand, the macro-financial environment provided strong support for service sector operations. The monetary and financial activities index remained at a high level, indicating continued strong financial system support for the real economy and providing a favorable monetary and credit environment for stable service sector development.
Looking ahead, the service sector is expected to maintain a steady recovery trend, though structural changes warrant attention. In the short term, as the holiday effect gradually fades, sentiment in some contact-based and gathering-oriented service industries may decline from their high levels. However, the normalization of social activities will continue to solidify their development foundation. From a medium to long-term perspective, driven by continuous efforts to expand domestic demand and stimulate consumption, and with the service industry Business Activity Expectation Index holding at an optimistic level around 55.8%, new growth drivers in the service sector will be continually cultivated and strengthened. Its role as the main channel for employment and a stabilizer for economic growth will become more pronounced. For the full year, the service sector is projected to demonstrate a development pattern of "steady progress with structural optimization."
As post-holiday work resumption progresses and consumption scenarios gradually return to normal, the service sector's sentiment level is expected to gradually move back into expansionary territory. Concurrently, with ongoing policy support for boosting domestic demand and consumption, and the optimistic signal from the high Business Activity Expectation Index, the momentum for the service sector's recovery is set to strengthen further.