China’s manufacturing sector recorded an increase in activity in February, supported by growth in both production and new orders, according to survey data released by S&P Global.
The Caixin Manufacturing Purchasing Managers’ Index (PMI) rose to 50.8 in February from 50.1 in January, surpassing market expectations of 50.4. A reading above 50.0 indicates expansion in the sector. This marks the fifth consecutive month of growth, with the latest data showing the fastest expansion in output since November 2024.
The increase in new orders was attributed to improving economic conditions and the introduction of new products. Additionally, new export business expanded for the first time since November.
Higher production levels contributed to an increase in purchasing activity, though input inventories saw a decline for the first time since July 2024. Meanwhile, manufacturers continued to reduce staffing levels, extending the trend of workforce contraction to six consecutive months.
On pricing, input cost inflation rose slightly, while manufacturers reduced output prices for the third straight month.
Looking ahead, business confidence in the manufacturing sector improved in February, with expectations of stronger market demand and planned new product launches expected to support production growth in the coming months.
Despite the positive indicators, challenges remain for China’s economy, including concerns over employment and household income, which may impact domestic demand and overall economic stability, according to Caixin Insight Group senior economist Wang Zhe.
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