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, influenced by factors such as the Spring Festival holiday, the Manufacturing Purchasing Managers' Index (PMI) stood at 49.0%, a decrease of 0.3 percentage points from January. The Non-Manufacturing Business Activity Index was 49.5%, up 0.1 percentage points from the previous month. The Comprehensive PMI Output Index registered 49.5%, down 0.3 percentage points from January.
A chief statistician from the survey center noted that historically, the PMI for the month containing the Spring Festival often shows some volatility. This year, with the extended holiday falling entirely in mid-to-late February, corporate production and operations were somewhat affected, leading to an overall decline in manufacturing market activity.
An analyst with the federation stated that the economy is currently in a critical period of gathering strength for recovery. It is essential to significantly increase government investment in public goods, substantially expand demand, boost corporate orders, and fully leverage the effectiveness of government macroeconomic governance through sufficiently forceful counter-cyclical and cross-cyclical adjustments via macroeconomic policies. This approach aims to vigorously boost corporate confidence and strive for a strong start to the 15th Five-Year Plan period.
The data indicated that the Manufacturing PMI for February was 49.0%, reflecting a lower level of prosperity compared to January. Specifically, the Production Index and the New Orders Index were 49.6% and 48.6% respectively, down 1.0 and 0.6 percentage points from January, indicating a decline in manufacturing production and market demand. By sector, industries such as agricultural and food processing, and computer/communication/electronic equipment maintained production and new orders indices above the 50-point threshold, indicating expanding supply and demand. Conversely, sectors like textiles/apparel and automobiles continued to have both indices below 50, suggesting weaker market activity.
An analyst from the China Logistics Information Center commented that the drop in the New Orders Index in February indicates an overall tightening of manufacturing market demand, primarily due to the ongoing effects of seasonal factors. Firstly, the Spring Festival holiday in mid-to-late February significantly impacted order intake and production scheduling for manufacturing firms, especially in upstream and midstream industries. Secondly, persistent low temperatures in many regions continued to affect outdoor construction work, leading to a corresponding contraction in demand for related equipment, facilities, and raw materials.
By enterprise size, the PMI for large enterprises was 51.5%, up 1.2 percentage points from January and above the 50-point mark. The PMI for medium and small enterprises were 47.5% and 44.8% respectively, down 1.2 and 2.6 percentage points from January, both below the 50-point threshold.
Notably, high-tech manufacturing continued to show growth momentum. The High-Tech Manufacturing PMI was 51.5%, remaining in expansion territory and significantly higher than the overall manufacturing average, indicating favorable development trends in related industries. The Consumer Goods Industry PMI was 48.8%, up 0.5 percentage points from January, showing a recovery in prosperity. The Equipment Manufacturing and High-Energy-Consumption Industries PMI were 49.8% and 47.8% respectively, down 0.3 and 0.1 percentage points from January, indicating a slight decline in prosperity levels.
The analyst further stated that seasonal factors continued to affect manufacturing in February, leading to a slowdown in operations. However, this slowdown is considered short-term, and positive changes are still accumulating. With the impact of the Spring Festival holiday largely subsiding in March, temperatures rising across regions, and factories and construction sites fully resuming operations, economic and social activities are expected to return to normal. Many provinces and cities have set development targets. Supported by the continued implementation of policies aimed at stabilizing the economy, expanding domestic demand, and stabilizing foreign trade, alongside steady progress in reforms and development initiatives by local governments, manufacturing is forecast to stabilize and recover in March. Market demand is expected to grow steadily in volume and improve in quality. Production activities are anticipated to rebound well, with growth momentum in new sectors accelerating. Large enterprises are likely to maintain stable expansion, while small and medium-sized enterprises are expected to recover relatively quickly. Manufacturing firms are also becoming more optimistic about future prospects, with the Production and Business Activity Expectations Index rising to 53.2%, up 0.6 percentage points from January.
Data showed the Non-Manufacturing Business Activity Index was 49.5% in February, up 0.1 percentage points from January, indicating some improvement in the overall prosperity level of the non-manufacturing sector.
Within this, the service industry's prosperity level recovered. The Services Business Activity Index was 49.7%, up 0.2 percentage points from January. By sector, industries related to resident travel and consumption saw rapid growth in business volume due to the holiday effect. Sectors like accommodation, catering, and culture/sports/entertainment had business activity indices above 60.0%, indicating high prosperity. Retail and air transport saw their indices rise above 52.0%. Meanwhile, industries such as capital market services and real estate operated with low business activity indices, reflecting subdued market activity. The Services Business Activity Expectations Index was 55.8%, remaining in a high prosperity range, indicating service sector firms maintain optimism about near-term market development.
The construction sector's prosperity level declined. Influenced by the concentration of workers returning home for the holiday and the suspension of some construction projects, the Construction Business Activity Index fell to 48.2%, down 0.6 percentage points from January, indicating a continued downturn. However, the Construction Business Activity Expectations Index rose to 50.9%, up 1.1 percentage points from January and returning above the 50-point threshold, suggesting restored confidence among construction firms regarding future industry development.
An analyst from the logistics information center concluded that overall, non-manufacturing prosperity levels changed little from the previous month. The construction sector exhibited typical off-season characteristics, while holiday-related consumption sectors saw a significant boost in activity. Financial support for the real economy remained relatively strong. Enterprises maintain stable and optimistic expectations for the future market. After the holiday, work resumption will proceed steadily. With the sequential commencement of key investment projects, activity in the construction sector, closely tied to investment, is expected to be released, leading to a gradual recovery in prosperity. Meanwhile, the high base effect formed during the holiday period for consumption-related services might lead to a slight dip in their prosperity levels, but the gradual restoration of offline consumption scenarios post-holiday should help stabilize the operation of these service industries.