BEIJING: China’s factory activity contracted more than expected in February, as a longer Lunar New Year holiday disrupted production schedules and slowed order flows, according to an official survey released on March 4. The National Bureau of Statistics said the official manufacturing purchasing managers’ index fell to 49.0 in February from 49.3 in January. Readings below 50 indicate contraction. The result was slightly below the median estimate in a market survey and marked a second straight month of contraction.
The factory survey showed weaker momentum across key components. The production sub-index dropped to 49.6, down 1.0 point from January, while the new orders sub-index fell to 48.6, down 0.6 point. The gauge for business expectations rose to 53.2, up 0.6 point, remaining in expansion territory. The bureau said seasonal factors played a role in February’s reading, with many factories scaling back output during the Spring Festival period.
The holiday’s timing and duration were a central feature of the month’s data. China’s official Spring Festival holiday ran for nine days from Feb. 15 to Feb. 23, extending the period of widespread factory closures and worker travel. The bureau’s release calendar also reflected the seasonal distortion, scheduling the February PMI publication for March 4. By company size, the PMI for large enterprises rose to 51.5, while medium-sized firms registered 47.5 and small firms fell to 44.8, highlighting pressure among smaller producers.
Holiday effects ripple through factories
Outside manufacturing, overall activity remained soft but showed a marginal improvement. The official non-manufacturing PMI, which covers services and construction, rose to 49.5 in February from 49.4 in January, still below the 50 mark. Within that measure, the services business activity index edged up to 49.7, while the construction business activity index slipped to 48.2. The bureau linked the construction weakness to holiday-related pauses as workers returned home and projects temporarily slowed.
The latest breakdown underscored uneven performance within industry segments. Officially cited details showed that some higher-value manufacturing areas expanded, with the PMI for high-tech manufacturing reported at 51.5 in February. At the same time, several traditional industries remained under 50, indicating contraction. The official series is compiled from a survey of purchasing managers, tracking changes in output, orders, inventories, employment and delivery times, and is widely followed as a timely indicator of near-term activity.
Private PMI points to a different picture
A separate private-sector survey released the same day painted a contrasting view of factory conditions. That gauge showed manufacturing activity at 52.1 in February, up from 50.3 in January, and indicated faster growth in output and new orders. Differences between the two readings can reflect variations in survey coverage, sample composition and seasonal adjustment methods. Both surveys use the 50-point threshold to distinguish expansion from contraction, but they can diverge month to month, particularly around major holidays.
The February readings arrived as officials and businesses assess demand conditions at the start of the year. The official survey’s lower new orders reading suggested subdued intake during the holiday period, while the large-enterprise index staying above 50 pointed to relative resilience among bigger manufacturers. The bureau said seasonal effects are an important consideration for interpreting February data because production patterns and staffing can shift sharply around the Spring Festival. The next official PMI release is expected to provide a clearer view after holiday disruptions fade – By Content Syndication Services.