(Yicai Global) March 1 -- China’s manufacturing activity surged to the highest level since May 2012 in February, as the economy bounces back from Covid-19 and more supportive policies come into play, according to the latest data.
The purchasing managers’ index for manufacturing stood at 52.6 in February, a gain of 2.5 points from the previous month, according to data the National Bureau of Statistics released today. It is the second month in a row that the reading has stayed above the benchmark of 50, indicating expansion.
"The fallout from the Covid-19 pandemic has started to fade and policies to stabilize economy took greater effect in February," said Zhao Qinghe, senior statistician at the NBS' Service Survey Center. "As conditions improved, businesses ramped up production and operations, boosting the return to prosperity.”
All the sub-indexes climbed from January. The production sub-index jumped 6.9 points to 56.7 and the new order sub-index advanced 3.2 points to 51.1.
There are also signs of a rebound in overseas demand. The new export order sub-index surged 6.3 points to 52.4, bouncing back to above the benchmark of 50 after 21 straight months in contraction territory.
Market expectations also improved. The production and business activity expectations sub-index gained 1.9 points to reach 57.5, a 12-month high, indicating that companies are getting more confident.
The trend of an all-round economic recovery is now even clearer after the PMI re-entered positive territory in January, said Zhang Liqun, guest analyst at China Federation of Logistics and Purchasing.
However, companies are still under big production and operating difficulties and more needs to be done to boost demand, ensure supplies and stabilize prices, Zhang said. Just over half of those firms surveyed said that demand is weak and almost half said that raw material costs are still high.
As supportive policies take effect, infrastructure investment will keep growing at a fast rate, manufacturing will get support from both the supply and demand ends, and the recovery in consumption will continue for some time, said Wang Qing, chief macro economy analyst at Golden Credit Rating International.
Editors: Liao Shumin, Kim Taylor