In February, China's manufacturing purchasing managers' index (PMI) stood at 49.0%, down 0.3 percentage points from the previous month, influenced by factors including the Spring Festival holiday. The non-manufacturing business activity index reached 49.5%, up 0.1 percentage points from January. The composite PMI output index was 49.5%, a decrease of 0.3 percentage points month-on-month.

Manufacturing PMI experienced a slight decline in February, reflecting a dip in the sector's prosperity level. Historically, the PMI in the month containing the Spring Festival tends to fluctuate. This year, the extended holiday period, which fell entirely in the latter half of February, impacted business operations and production, leading to an overall decrease in manufacturing activity.

Both production and demand showed signs of slowing. The production index and new orders index were 49.6% and 48.6%, respectively, down 1.0 and 0.6 percentage points from the prior month. Certain industries, including agricultural and food processing, computers, communication equipment, and electronics, maintained expansionary levels in both production and new orders. In contrast, sectors such as textiles, apparel, and automobiles continued to operate below the threshold, indicating weaker market activity.

Large enterprises saw their PMI rise to 51.5%, up 1.2 percentage points from January, indicating sustained expansion. Medium and small enterprises were more significantly affected by the holiday, with PMI readings of 47.5% and 44.8%, down 1.2 and 2.6 percentage points, respectively, reflecting a decline in business sentiment.

High-tech manufacturing continued to demonstrate strong growth momentum, with a PMI of 51.5%, remaining in expansionary territory and significantly outperforming the overall manufacturing sector. The consumer goods industry PMI rose to 48.8%, up 0.5 percentage points, indicating improved conditions. Equipment manufacturing and high-energy-consumption industries recorded PMI levels of 49.8% and 47.8%, down 0.3 and 0.1 percentage points, respectively.

Business expectations improved, with the production and operation outlook index reaching 53.2%, up 0.6 percentage points from the previous month. Industries such as general equipment, railways, ships, aerospace, and other transport equipment maintained high confidence levels, with expectation indices above 56.0%.

Non-manufacturing business activity showed a modest rebound in February. The service industry index rose to 49.7%, up 0.2 percentage points, driven by holiday-related consumption in sectors such as accommodation, catering, culture, sports, and entertainment, which recorded PMI readings above 60.0%. Retail and air transport also saw improved activity. However, capital market services and real estate remained subdued. The service sector business expectation index stood at 55.8%, reflecting continued optimism.

Construction activity declined, with the business activity index falling to 48.2%, down 0.6 percentage points, as projects were paused during the holiday period. Despite this, the construction expectation index rose to 50.9%, returning to expansionary territory and indicating restored confidence among industry players.

The composite PMI output index declined to 49.5%, signaling an overall slowdown in corporate production and operational activity compared to January. The index is composed of the manufacturing production index (49.6%) and the non-manufacturing business activity index (49.5%).