The manufacturing purchasing managers' index (PMI) for February registered a decline, while the non-manufacturing business activity index saw a slight increase.

In February, influenced by factors such as the Spring Festival holiday, the manufacturing PMI stood at 49.0%, a decrease of 0.3 percentage points from the previous month. The non-manufacturing business activity index was 49.5%, up by 0.1 percentage points from January. The composite PMI output index was 49.5%, down by 0.3 percentage points from the previous month.

I. Manufacturing PMI Shows a Decline The manufacturing PMI for February was 49.0%, indicating a lower level of business activity compared to January. Historically, the PMI for the month containing the Spring Festival often experiences fluctuations. This year, the holiday period was extended and fell entirely in mid-to-late February, impacting business production and operations, leading to an overall decrease in manufacturing market activity.

1. Both Production and Demand Sides Slow Down The production index and the new orders index were 49.6% and 48.6% respectively, down by 1.0 and 0.6 percentage points from the previous month, indicating a slowdown in both manufacturing production and market demand. By sector, industries such as agricultural and food processing, and computer communication and electronic equipment maintained production and new orders indices above the 50.0 threshold, indicating continued expansion in production and demand. Conversely, sectors like textiles, apparel, and automobiles saw both indices remain below 50.0, reflecting weaker market activity.

2. Large Enterprises Continue Expansion The PMI for large enterprises was 51.5%, an increase of 1.2 percentage points from the previous month, indicating sustained expansion in their production and operations. Medium and small enterprises were more significantly affected by the Spring Festival holiday. Their PMI readings for the month were 47.5% and 44.8% respectively, down by 1.2 and 2.6 percentage points, indicating a decline in their business activity levels.

3. High-Tech Manufacturing Maintains Growth Momentum The PMI for high-tech manufacturing was 51.5%, remaining in expansion territory and significantly higher than the overall manufacturing average, indicating favorable development trends in related industries. The PMI for the consumer goods industry was 48.8%, up 0.5 percentage points from the previous month, showing a recovery in activity. The PMI for equipment manufacturing and high-energy-consumption industries were 49.8% and 47.8% respectively, down by 0.3 and 0.1 percentage points, indicating a slight decline in activity levels.

4. Improved Business Expectations The production and business activity expectation index was 53.2%, an increase of 0.6 percentage points from the previous month, indicating growing confidence among manufacturing firms regarding post-holiday market development. In sectors such as general equipment, and railway, ship, aerospace equipment, the expectation indices were above 56.0%, indicating high optimism among related enterprises about near-term industry prospects.

II. Non-Manufacturing Business Activity Index Registers Slight Increase The non-manufacturing business activity index for February was 49.5%, up 0.1 percentage points from the previous month, indicating a slight improvement in the overall activity level of the non-manufacturing sector.

1. Service Sector Activity Recovers The business activity index for the service sector was 49.7%, up 0.2 percentage points from January. Boosted by the holiday effect, industries related to resident travel and consumption saw rapid growth in business volume. The business activity indices for accommodation, catering, culture, sports, and entertainment were all above 60.0%, indicating high activity levels. Similarly, indices for retail and air transport rose above 52.0%. Meanwhile, sectors such as capital market services and real estate had business activity indices operating at low levels, indicating subdued market activity. The business activity expectation index for the service sector was 55.8%, remaining in a high景气区间, indicating service sector firms maintain optimism about recent market developments.

2. Construction Sector Activity Declines Influenced by the concentration of workers returning home for the Spring Festival and the suspension of some construction projects, the business activity index for the construction sector fell to 48.2%, down 0.6 percentage points from the previous month, indicating a continued decline in activity. However, the business activity expectation index for construction was 50.9%, up 1.1 percentage points and returning above the 50.0 threshold, suggesting a recovery in confidence among construction firms regarding future industry development.

III. Composite PMI Output Index Declines The composite PMI output index for February was 49.5%, down 0.3 percentage points from the previous month, indicating an overall slowdown in the production and operational activities of Chinese enterprises compared to January. This index is composed of the manufacturing production index (49.6%) and the non-manufacturing business activity index (49.5%).