China's Manufacturing PMI Falls to 50.3 in February Weighed Down by Lunar New Year Holiday
Xu Wei
/SOURCE : Yicai
China's Manufacturing PMI Falls to 50.3 in February Weighed Down by Lunar New Year Holiday

(Yicai Global) Feb. 28 -- China's official manufacturing Purchasing Managers' Index, or PMI, in February fell one point from last month with the Chinese Lunar New Year holidays contributing to slowing business activities.

The country's manufacturing PMI came in at 50.3 this month, decelerating from 51.3 in January, the national bureau of statistics, or NBS, and China federation of logistics & purchasing said today. Despite the slowdown, the manufacturing PMI has stayed above the boom-bust line for 19 consecutive months.

NBS senior data analyst Zhao Qinghe described the decline of the manufacturing PMI as "normal fluctuation," as the index tends to fall in the month of the Spring Festival holiday.

Production usually slows down around that time, which marks a week-long official holiday, with factories winding down and market activity weakening. Sub-indices for production and new orders went down slightly to 50.7 and 51, down 2.8 and 1.6 percentage points from last month. With employees taking vacations and manufacturing sector dropping demand for workers, employee index came in at 48.1, down 0.2 percentage point from last month.

The non-manufacturing business activity index was 54.4 in February, down 0.9 percentage point from last month, but 0.2 percentage point higher than that of the same period of last year. The non-manufacturing industry maintained a relatively high prosperity level, NBS data showed.

Among them, the service business activity index was 53.8, down 0.6 percentage point from last month, but higher than the same period of last year, Zhao added. With the holiday effects, consumption upgrades and strong holiday consumer market, the life services business activity index reached 59.1, rising for two consecutive months. However, business activity indexes for securities, insurance, real estate, residential services and maintenance businesses were below the critical point, and the total business volume dropped slightly.

Affected by the cold weather and the Spring Festival holidays, the construction business activity index was 57.5, down 3.0 percentage points from last month. The construction sector maintained growth, but its expansion slowed down, Zhao said.

The composite PMI output index was 52.9 in February, down 1.7 percentage points from the previous month, but significantly above the critical point, indicating that the overall production and business activities of Chinese enterprises maintained an upward trend.

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Keywords: CFLP , PMI , NBS , Business Activity , Chinese New Year