China's manufacturing sector showed a slight contraction in February, with the official Purchasing Managers' Index (PMI) registering at 49.0%, a decrease of 0.3 percentage points from the previous month. This indicates a decline in the prosperity level of the manufacturing industry.
Analyzed by enterprise size, the PMI for large enterprises stood at 51.5%, an increase of 1.2 percentage points from January, remaining above the 50-point mark that separates expansion from contraction. In contrast, medium and small enterprises recorded PMIs of 47.5% and 44.8% respectively, declining by 1.2 and 2.6 percentage points, and staying below the threshold.
Among the five sub-indices that constitute the manufacturing PMI, all—including production, new orders, raw material inventories, employment, and supplier delivery times—remained in contraction territory. The production index was 49.6%, down 1.0 percentage point, signaling a slowdown in manufacturing output. The new orders index came in at 48.6%, a drop of 0.6 percentage points, reflecting weakened market demand. The raw materials inventory index was 47.5%, edging up 0.1 percentage point, indicating a slight narrowing in the rate of inventory decline. The employment index registered 48.0%, down 0.1 percentage point, suggesting a minor dip in hiring sentiment. The supplier delivery time index was 49.1%, falling 1.0 percentage point, which points to slower delivery times from suppliers compared to the previous month.
In the non-manufacturing sector, the business activity index for February was 49.5%, a slight increase of 0.1 percentage point from January, indicating a modest improvement in sentiment. By sector, the construction business activity index was 48.2%, down 0.6 percentage points, while the services index was 49.7%, up 0.2 percentage points. Within the services sector, industries such as accommodation, catering, culture, sports, and entertainment maintained high activity levels above 60.0%, whereas capital market services and real estate remained below the expansion-contraction threshold.
The new orders index for non-manufacturing was 45.2%, declining 0.9 percentage points, indicating a pullback in market demand. The construction new orders index improved to 42.2%, up 2.1 percentage points, while the services new orders index fell to 45.7%, down 1.4 percentage points. The input price index rose to 50.9%, up 0.9 percentage points, suggesting an overall increase in input costs for non-manufacturing firms. The construction input price index was 49.1%, down 2.9 percentage points, while the services input price index increased to 51.2%, up 1.5 percentage points. The selling price index remained unchanged at 48.8%, still below the threshold, indicating overall selling prices were lower than the previous month. The construction selling price index was 47.6%, down 0.6 percentage points, while the services selling price index was 49.0%, up 0.1 percentage point. The employment index for non-manufacturing was 46.0%, down 0.1 percentage point, reflecting a slight decrease in hiring sentiment. The construction employment index improved to 42.5%, up 1.4 percentage points, while the services employment index fell to 46.6%, down 0.4 percentage points. The business expectations index stood at 55.0%, down 1.0 percentage point but remaining in high expansion territory, indicating sustained confidence among non-manufacturing firms. The construction expectations index was 50.9%, up 1.1 percentage points, while the services expectations index was 55.8%, down 1.3 percentage points.
The composite PMI output index, which covers both manufacturing and non-manufacturing sectors, was 49.5% in February, down 0.3 percentage point from January, suggesting an overall slowdown in production and business activity across Chinese enterprises.