China’s factory activity slumps more than expected in February as holiday disrupts production
A cargo ship is parked at a dock loading and unloading containers at the Lianyungang Port Container Terminal in China’s Jiangsu Province on March 1, 2026.
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China’s factory activity was disrupted in February as manufacturers stopped production and shipping cargo to celebrate an extended holiday, an official survey showed on Wednesday.
The official manufacturing purchasing managers’ index fell to 49 in February. Office for National StatisticsWe missed the economists’ prediction of 49.1. Values below 50 indicate contraction, while levels above this threshold indicate expansion.
This marks a second consecutive month of contraction, with PMI readings matching October and April 2025 levels. The official PMI was at 49.3 in January, following a brief recovery in December.
Official data showed the composite PMI, a broader measure that tracks activity across manufacturing and services, fell to 49.5 from 49.8 in January.
Non-manufacturing PMI, which includes services and construction, decreased by 0.1 point to 49.5.
The 9-day Lunar New Year holiday saw a surge in travel, leisure activities and duty-free shopping, according to preliminary official figures. This year’s holiday, which lasted from February 15 to February 23, was the longest holiday on record as Chinese authorities seek to boost consumer spending.
The world’s second-largest economy has struggled to recover from deflationary pressure since the end of the pandemic due to a protracted housing crisis and weak employment market prospects.
Beijing will announce a set of economic targets at a parliament meeting on Thursday. Economists largely expected policymakers to lower the growth target for this year to a range of 4.5% to 5% from “about 5%” targeted in the past three years.
