(Yicai Global) March 1 -- The expansion in China’s manufacturing activity last month was the smallest it has been since last May, according to a private gauge, as factories closed for the country’s main annual holiday over the Lunar New Year.

The Caixin purchasing managers’ index for manufacturing was 50.9 in February, according to data financial media outlet Caixin published today. The headline figure fell for a third month in a row, but remained in positive territory for a 10th straight month amid China’s ongoing economic rebound from the coronavirus pandemic.

It was also consistent with the manufacturing PMI that the National Bureau of Statistics issued yesterday. The official PMI, which tracks mostly large state firms, fell 0.7 percentage point to 50.6, logging a third consecutive month of decline.

The Caixin PMI, also known as the Caixin-Markit PMI, surveys 500 manufacturers that are typically smaller and privately owned. A reading above 50 signals expansion.

Its sub-indexes show that supply and demand in the manufacturing sector continued to expand last month, but at a slower pace. The sub-index for production and new orders were at the lowest in the past 10 and nine months, respectively. The sub-index for new export orders fell sharply below the 50-point mark for a second straight month, as foreign demand fell due to the global pandemic.

The price index continued to remain high, and the purchasing price index for manufactured goods rose much higher than 50. Prices of raw materials, especially industrial metals, continued to rise rapidly, and transportation costs also soared, leading to a further increase in cost-end prices, according to the companies surveyed.

Despite the slowing expansion in supply and demand, manufacturers are confident that the pandemic situation will improve. In February, the production and operation expectations index jumped to the second-highest point since September 2014.

Companies are more optimistic about the future because of the experience they have accumulated in epidemic prevention and control over the past year, especially as the adverse autumn and winter seasons come to an end, said Wang Zhe, senior economist at the Caixin Think Tank.

Editor: Peter Thomas