THE country’s factory activity expanded in February at a slower pace than a month earlier, hitting the lowest level since last May and missing market expectations after brief COVID-related disruptions earlier in the year.

The official manufacturing Purchasing Manager’s Index (PMI) fell to 50.6 from 51.3 in January, data from the National Bureau of Statistics (NBS) showed yesterday, remaining above the 50-point mark that separates growth from contraction.

Analysts had expected it to decline to 51.1.

Chinese factory activity normally goes dormant during the Lunar Chinese New Year break as workers celebrate the festival.

Generally, China’s economic recovery has been gathering pace due to robust exports, pentup demand and government stimulus.

The official PMI, which largely focuses on big and State-owned firms, showed the sub-index for new export orders was 48.8 in February compared with 50.2 in January, slipping back into contraction after months boosted by overseas demand.

A sub-index for activity among small firms stood at 48.3 in February versus 49.4 a month earlier.

A sub-index for employment in the official PMI stood at 48.1 in February, down from January’s 48.4.

China’s factory gate prices rose year on year in January for the first time in a year, as months of strong manufacturing growth pushed raw material costs higher.

China will reinforce policy support for foreign trade and ensure the smooth operation of supply chains, the country’s new commerce minister said last week.

In the services sector, activity expanded for the 11th consecutive month but at a slower pace although the picture was more mixed. While travel plunged, spending at larger retailers and restaurants in major cities climbed from a year ago when the economy was in lockdown. Cinema box office sales also soared. A set of early economic indicators tracked by Bloomberg showed the recovery continued to gather pace in February.

(SD-Agencies)