Factory activity in China grew at the slowest pace in nine months in February, as business operations slowed during the country’s Lunar New Year holiday, according to official data released on Sunday.
The Purchasing Managers’ Index (PMI), a key measure of manufacturing activity, fell to 50.6 last month from 51.3, the National Bureau of Statistics said, with a slowdown in production, new orders and foreign trade.
Although this was the lowest overall reading since last May, when the manufacturing PMI also came in at 50.6, the number is still above the 50-point mark separating growth from contraction.
“The Lunar New Year fell in mid-February this year, and the holiday factor showed a greater impact on the production and operations of companies this month,” said Zhao Qinghe, chief statistician with the National Bureau of Statistics.
Both the new export orders index and the import orders index were in contraction, affected by the slowdown in production and purchasing activities during the holiday period, Zhao added.
However, market expectations remained bullish and the major raw material purchase price index remained relatively elevated.
Official figures also showed that even as small businesses are affected more by seasonal factors, the outlook for sectors such as specialized equipment, automobiles and some electronics remains in a higher range – with some of the companies surveyed indicating that March will be their “peak season”.
Meanwhile, the non-manufacturing PMI stood at 51.4 this month, down from 52.4 the previous month, according to the National Bureau of Statistics.
She pointed to weakness in the service industry and construction activity, and that the holiday was also affected nationwide.