China’s economic recovery continued but slowed more than expected in February
- China’s official manufacturing purchasing managers’ index (PMI) fell to 50.6 in February from 51.3 in January
- The official non-manufacturing PMI, which measures sentiment in the service and construction sectors, fell to 51.4 from 52.4
China’s economic recovery continued in February, but at a slower-than-expected pace, with all major sectors posting their lowest growth rates since last spring.
The data encompasses the Lunar New Year holiday period, during which economic activity usually slows. But a spike in coronavirus infections in northern China in January might have depressed activity in February more than usual, especially in the service sector, after the government urged workers not to return to their hometowns for the holidays to avoid spreading infections.
February’s reading was below the median prediction of 51.1 in a Bloomberg poll of analysts, and was the lowest since February 2020, when the index hit a record low of 29.6 at the height of the coronavirus lockdowns.
China’s non-manufacturing PMI – a gauge of sentiment in the service and construction sectors – fell to 51.4 in February from January’s reading of 52.4. The result was also below expectations, with analysts predicting a smaller decline to 52.1. The non-manufacturing index was the lowest since May 2020, which was second only to the all-time low of 35.7 reported in February last year.
Within the non-manufacturing PMI, the sub-index for the construction sector fell to 54.7 in February from 60.0 in January, while the service sector business activity index fell to 50.8 from 51.1.
A reading above 50 indicates growth in sector activity, while a reading below the mark represents contraction. The higher the reading above 50, the faster the pace of expansion.