China Feb. manufacturing PMI 49; est. 49.2

China Feb. manufacturing PMI 49; est. 49.2

China’s February 2024 Manufacturing PMI Rebounds to Three-Month High

China’s official manufacturing Purchasing Managers’ Index (PMI) rose to 50.2 in February 2024, marking a three-month high and signaling a return to expansion after contraction in January. The index, which separates growth from contraction at 50, exceeded market forecasts of 49.9 and followed a January reading of 49.1. This improvement reflects the impact of government stimulus measures aimed at stabilizing the economy, though growth remains uneven across sectors.

The recovery in factory activity was driven by stronger new orders, including a rebound in export demand, and increased production. However, challenges persist, including high unemployment and weak consumer spending, which continue to weigh on domestic demand. Analysts note that while industrial output and exports have outperformed expectations, retail sales remain sluggish, highlighting structural imbalances in the economy.

Input cost inflation accelerated due to rising raw material prices, though firms reduced selling prices to stimulate sales. Employment in the sector declined for the second consecutive month, as companies prioritized cost control amid uncertain demand. Business sentiment improved slightly, supported by recent policy initiatives, but concerns over external pressures—such as U.S. trade restrictions—remain a drag on long-term confidence.

The non-manufacturing PMI, covering services and construction, also expanded in February, rising to 50.4 from 50.2 in January, indicating broader economic stabilization. Investors will closely watch the upcoming Caixin PMI data, expected on March 3, 2026, for insights into private-sector activity.

With policymakers pledging further fiscal and monetary support, the focus remains on balancing growth with debt sustainability and addressing external risks, particularly as U.S.-China trade tensions evolve.

Reuters, March 1, 2025.