Data released on March 4 by the National Bureau of Statistics Service Industry Survey Center and the China Federation of Logistics & Purchasing showed that the Manufacturing Purchasing Managers' Index (PMI) for February was 49.0%, a decrease of 0.3 percentage points from the previous month. The Non-Manufacturing Business Activity Index was 49.5%, up 0.1 percentage points from January. The Comprehensive PMI Output Index stood at 49.5%, down 0.3 percentage points month-on-month. Experts generally believe that the service sector's performance in February was stronger than typical seasonal patterns, while the manufacturing sector's performance largely met expectations, with the current slowdown considered temporary. Moving forward, close attention must be paid to changes in the international situation, managing the intensity and pace of policies, and improving market demand to solidify the foundation for economic recovery.

The service sector demonstrated strength exceeding seasonal norms. The Services Business Activity Index for February was 49.7%, rising 0.2 percentage points from the previous month. Analysts attribute the stabilization of the service sector's performance primarily to the Spring Festival holiday effect, which boosted consumer spending. Business activity and new order indices for retail, air transport, accommodation, catering, and culture/sports/entertainment industries all saw significant increases, with many surpassing the 50% threshold. The Services Business Activity Expectation Index remained high at 55.8%, indicating sustained optimism among service sector firms. Concurrently, financial services for the real economy remained robust. The monetary and financial services sector has maintained business activity and new order indices above 60% for three consecutive months, reflecting strong operational trends and demand, particularly for bank credit. The expectation index for this sector remains above 65%, suggesting continued strong support for the real economy under a moderately accommodative monetary policy.

In contrast, the construction sector's activity level declined in February. The Construction Business Activity Index fell to 48.2%, a drop of 0.6 percentage points, largely due to the holiday period when workers returned home and some projects were suspended. However, with the Spring Festival concluded, the seasonal resumption of production and construction, coupled with the commencement of key projects, is expected to boost activity in construction and related producer services industries.

Multiple positive factors are poised to support a stabilization and rebound in manufacturing. The 0.3 percentage point decline in the February Manufacturing PMI was broadly in line with expectations, as the "Spring Festival month" typically sees an average decrease. The extended holiday, resulting in factory shutdowns and worker absences, was the primary reason for the drop in the production index, which fell to 49.6%. On the demand side, the New Orders Index declined by 0.6 percentage points to 48.6%. This contraction was attributed to the holiday's impact on order intake and production scheduling, particularly for mid- and upstream industries, and lingering effects of cold weather on outdoor operations, which dampened demand for related equipment and materials. Analysts suggest this demand tightening is a short-term, seasonal phenomenon. With various provinces setting development targets and the continued implementation of policies aimed at stabilizing the economy, expanding domestic demand, and stabilizing foreign trade, manufacturing is expected to stabilize and rebound in March. Demand is forecast to increase steadily in volume while improving in quality.

The February PMI data also revealed several positive developments within manufacturing. The manufacturing momentum indicator showed signs of improvement, suggesting a repair in internal growth drivers. The High-Tech Manufacturing PMI remained in expansionary territory at 51.5%, significantly outperforming the overall manufacturing average. The Consumer Goods Industry PMI also improved. Furthermore, the Production and Business Activity Expectation Index rose to 53.2%, indicating growing confidence among manufacturers post-holiday, with particular optimism in industries like general equipment and transportation equipment manufacturing.

Key factors influencing the future trajectory of the Manufacturing PMI include the impact of international trade tensions, the performance of the real estate market, and the timing and strength of domestic growth-stabilization policies. Analysts also emphasize the need to monitor geopolitical developments for their potential impact on global commodity markets and China's foreign trade. Experts stress that as the economy is at a critical juncture for recovery, it is essential to significantly increase government investment in public goods, substantially expand demand, boost corporate orders, and effectively utilize macroeconomic policies for counter-cyclical and cross-cyclical adjustment to vigorously enhance corporate confidence.