(Yicai Global) March 1 -- China's factory activity widened the slowest since last May in February amid the country's biggest annual holiday period of Spring Festival.

The manufacturing purchasing manager index fell by 0.7 points to 50.6 from a month earlier, remaining above the threshold that separates expansion from contraction for the 12th straight month, the National Bureau of Statistics revealed yesterday.

The seven-day Chinese New Year holiday greatly affected companies' operations and production, Zheng Houcheng, director of Yingda Securities' research institute, told Yicai Global.

The transport sector was impacted by the government's recommendation for people to avoid traveling during the holiday to control the Covid-19 epidemic but that also meant that employees got back to work earlier than usual, Zheng added.

Some sub-indexes pointed down. New orders fell by 0.8 points to 51.5, the lowest since last June. Production declined by 1.6 points to 51.9. But exporters' production and operation activity expectations gauge logged 60.8 as most trading firms remain optimistic about overseas demand.

Some of the better-performing sectors were pharmaceutics, general equipment, as well as electrical and mechanical equipment. Production in these sectors was higher than the flagship index, with their new orders exceeding a level of 55.

The pharmaceutical sector may be going strong due to the Covid-19 vaccines and mass inoculation, said Zheng. The robust fields of equipment manufacturing prove that the global macro economy is improving as China's export growth remained high, he added.

Large companies were recovering faster than smaller ones. Big firms' PMI was 52.2 in February amid stable expansion. But small enterprises' counterpart was down by 1.1 points to 48.3 and medium-sized firms' benchmark edged down by 1.8 points to 49.6 as these types of companies were more affected by the holiday lull.

China's non-manufacturing business activity index, which includes services, banking, and real estate, was at 50.8, some 0.3 point below that of January. The construction industry may have impacted that as activities were reduced in February.

The composite PMI output Index slid by 1.2 points to 51.6, indicating slower expansion.

Editors: Zhang Yushuo, Emmi Laine, Xiao Yi