Economic Watch: China's manufacturing PMI eases slightly in February, business confidence up

BEIJING, March 4 (Xinhua) -- China's manufacturing purchasing managers' index (PMI) eased in February due to seasonal factors, while business confidence improved and high-tech manufacturing maintained growth momentum, official data showed on Wednesday.

The PMI for the sector came in at 49 in February, down 0.3 percentage points from the previous month, according to the National Bureau of Statistics (NBS). A reading above 50 indicates expansion, while one below 50 reflects contraction.

The extended Spring Festival holiday, which fell in middle and late February this year, temporarily weighed on corporate production and business activities, leading to an overall decline in manufacturing market activity, according to Huo Lihui, chief statistician with the NBS.

The sub-indices for production and new orders stood at 49.6 and 48.6, down 1 percentage point and 0.6 percentage points month on month, respectively, reflecting a slight pullback in both manufacturing output and market demand.

A closer look reveals that industries including agricultural and sideline food processing, as well as computer, communication and electronic equipment, all saw their production and new order indices remain in expansion territory. Meanwhile, the two sub-indices for textiles and apparel, as well as automobiles, stayed below the 50 threshold, signaling relatively weak market vitality.

The PMI for large enterprises reached 51.5 in February, up 1.2 percentage points month on month, showing that major manufacturers maintained steady production and business expansion, Huo said.

However, affected more significantly by the holiday disruptions, medium-sized and small enterprises recorded respective PMIs of 47.5 and 44.8, down 1.2 percentage points and 2.6 percentage points from the previous month, respectively.

The PMI for high-tech manufacturing stood at 51.5 last month, outperforming the overall manufacturing sector, with relevant industries maintaining sound growth momentum.

The PMI for consumer goods industries rose 0.5 percentage points month on month to 48.8, revealing an improvement in the business climate. By contrast, the PMIs for equipment manufacturing and energy-intensive industries edged down 0.3 percentage points and 0.1 percentage points to 49.8 and 47.8, respectively, pointing to a slight cooling in activity.

The sub-index for production and business expectations climbed 0.6 percentage points from a month earlier to 53.2 in February, suggesting that manufacturing enterprises have grown more upbeat about market prospects after the Spring Festival holiday.

Industries including general equipment, as well as railway, shipping and aerospace equipment, last month reported expectations indices above 56, reflecting strong optimism among such firms regarding the near-term industrial outlook.

Wen Tao, an expert with the China Logistics Information Center, noted that the slowdown in February's PMI is short-lived and that encouraging trends are building up beneath the surface. As the impact of the Spring Festival holiday fades, temperatures rise across the country, and factories and construction sites resume full production in March, the economy will return to normal operation, Wen said.

Multiple provinces and municipalities across China have set clear development goals, Wen noted. With the continuous implementation of previous policies aimed at stabilizing the economy, expanding domestic demand and boosting foreign trade, as well as the steady advancement of local governments' reform and development efforts, China's manufacturing sector is expected to stabilize and rebound in March, Wen added. ■