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March 1, 2021

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Manufacturing growth slows in February

Source: Agencies | 00:05 UTC+8 March 1, 2021 | Print Edition

FACTORY activity in China grew at the slowest pace in nine months in February, as business operations slowed over the Lunar New Year holiday, according to data released yesterday.

The Purchasing Managers’ Index, a key gauge of manufacturing activity, fell to 50.6 last month from 51.3, according to the National Bureau of Statistics, with slowdowns in production, new orders and foreign trade.

Although this was the lowest reading overall since May, when manufacturing PMI also came in at 50.6, the figure remains above the 50-point mark separating growth from contraction for the 12th consecutive month.

“Lunar New Year fell in mid-February this year, and the holiday factor showed a greater impact on the production and operations of enterprises this month,” said NBS senior statistician Zhao Qinghe.

Zhao added that both the new export order index and import order index were in contraction, affected by slower production and purchasing activities during the festive period.

But market expectations remained bullish and the purchase price index of key raw materials remained relatively high.

The figures also showed that even as smaller firms were more affected by seasonal factors, expectations for sectors such as specialized equipment, automobiles and some electronics remain in a higher range, with some surveyed firms indicating March will be a “peak season” for them.

Meanwhile, the non-manufacturing PMI was 51.4 this month, down from 52.4 the month before, said the NBS.

It noted weakening in the service industry and construction activity, also impacted by the nationwide holiday.

In breakdown, consumption-related segments such as retail sales, catering and entertainment logged increases in business activities, Zhao said.

NBS data also showed weakening performances in construction industry due to seasonal factors, with the sub-index for business activities declining to 54.7 in February from 60 a month earlier. Yet, the sector logged increases in new orders and business activity anticipation, reflecting recovering demand.

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