China's manufacturing sector contracted more than anticipated in February, with the official PMI dropping to 49.0, as the extended Lunar New Year holiday disrupted production and supply chains.
Official PMI Data Shows Contraction
- The National Bureau of Statistics reported the manufacturing Purchasing Managers' Index (PMI) at 49.0 in February, below economists' forecast of 49.1.
- This marks a second consecutive month of contraction, following a reading of 49.3 in January and a brief rebound in December.
- A PMI below 50 indicates economic contraction, while readings above 50 signal expansion.
Extended Lunar New Year Holiday Disrupts Operations
- The 2026 Lunar New Year holiday ran from February 15 to 23, lasting nine days—the longest on record—compared to eight days spanning late January to early February in 2025.
- Chief NBS statistician Huo Lihui attributed the decline to holiday-induced pauses in factory operations and production, along with distortion effects from the festival timing.
Private Survey Reveals Sharp Rebound in Manufacturing
- In contrast, S&P Global's private China General Manufacturing PMI, conducted by RatingDog, surged to 52.1 in February, the strongest level since December 2020.
- This rebound was driven by a significant rise in new export orders, which increased at the most pronounced pace since September 2020, reflecting robust international demand.
Broader Economic Indicators Edge Lower
- The composite PMI, which tracks activity across manufacturing and services, fell to 49.5 from 49.8 in January.
- The non-manufacturing PMI, covering services and construction, decreased by 0.1 percentage point to 49.5.