China's manufacturing Purchasing Managers' Index (PMI) registered 49.0% in February, a decrease of 0.3 percentage points from the previous month, indicating a contraction in manufacturing sector activity. The non-manufacturing Business Activity Index stood at 49.5%, up 0.1 percentage points from January, reflecting a slight improvement in non-manufacturing sector conditions. The Composite PMI Output Index was 49.5%, down 0.3 percentage points from the prior month, suggesting an overall slowdown in business activity across Chinese enterprises.

Among manufacturing enterprises, large companies recorded a PMI of 51.5%, rising 1.2 percentage points from the previous month and remaining above the 50-point threshold that separates expansion from contraction. Medium and small enterprises reported PMI readings of 47.5% and 44.8%, respectively, declining by 1.2 and 2.6 percentage points, both below the critical level.

All five sub-indices composing the manufacturing PMI remained below the 50-point mark. The Production Index was 49.6%, down 1.0 percentage points from January, indicating slower manufacturing output. The New Orders Index came in at 48.6%, falling 0.6 percentage points, signaling weaker market demand. The Raw Materials Inventory Index was 47.5%, edging up 0.1 percentage points, suggesting a modest narrowing in the rate of inventory reduction. The Employment Index stood at 48.0%, down 0.1 percentage points, reflecting a slight dip in hiring sentiment. The Supplier Delivery Time Index was 49.1%, decreasing 1.0 percentage points, indicating longer delivery times from suppliers.

In the non-manufacturing sector, the Business Activity Index reached 49.5%. By sector, the construction industry index was 48.2%, down 0.6 percentage points, while the services industry index was 49.7%, up 0.2 percentage points. Within services, sectors such as accommodation, catering, culture, sports, and entertainment maintained high activity levels with indices above 60.0%, whereas capital market services and real estate sectors remained below the expansion threshold.

The New Orders Index for non-manufacturing was 45.2%, down 0.9 percentage points, pointing to subdued market demand. Construction new orders improved to 42.2%, up 2.1 percentage points, while services new orders declined to 45.7%, down 1.4 percentage points. The Input Prices Index rose to 50.9%, up 0.9 percentage points, indicating higher input costs for non-manufacturing firms. Construction input prices fell to 49.1%, down 2.9 percentage points, while services input prices increased to 51.2%, up 1.5 percentage points.

The Selling Prices Index held steady at 48.8%, remaining below the threshold and reflecting lower overall selling prices compared to the previous month. Construction selling prices dropped to 47.6%, down 0.6 percentage points, while services selling prices edged up to 49.0%, rising 0.1 percentage points. The Non-Manufacturing Employment Index was 46.0%, down 0.1 percentage points, indicating a slight decline in hiring. Construction employment improved to 42.5%, up 1.4 percentage points, while services employment fell to 46.6%, down 0.4 percentage points.

The Business Expectations Index for non-manufacturing stood at 55.0%, down 1.0 percentage points but still in high expansion territory, showing sustained confidence among non-manufacturing firms. Construction expectations rose to 50.9%, up 1.1 percentage points, while services expectations declined to 55.8%, down 1.3 percentage points.

The Composite PMI Output Index, which covers both manufacturing and non-manufacturing sectors, was 49.5% in February, down 0.3 percentage points from January, signaling a broad-based moderation in overall business activity.