China’s factory activity grows at fastest pace since October, private survey shows, beating official reading
An employee works on a carbon fiber production line at Zhongfu Shenying in Lianyungang, China’s eastern Jiangsu province, on July 31, 2025.
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Factory activity in China accelerated in January as manufacturers ramped up production and front-loading cargo ahead of the extended Lunar New Year holiday, according to an exclusive survey released Monday.
The seasonally adjusted RatingDog China General Manufacturing PMI, conducted by S&P Global, rose to 50.3 in January from 50.1 the previous month, in line with analysts’ expectations of 50.3 in a Reuters poll. A reading above the 50 indicator indicates expansion, while a reading below it indicates contraction.
This was the strongest level since October, when the private survey PMI came in at 50.6.
Production accelerated last month as new orders were received both domestically and internationally, leading companies to hire additional staff to cope with increased workloads and fulfill outstanding orders.
Total new orders increased for the eighth consecutive month, while new export orders rebounded as demand from overseas buyers, particularly in Southeast Asia, increased.
But the private survey showed business confidence fell to a nine-month low as firms worried about rising costs. Corporate expenses rose at the fastest pace in four months, pushing ex-factory prices up for the first time since November 2024.
The survey showed that metal prices, in particular, increased in the last survey period and input cost inflation reached its highest level since last September.
“Looking ahead, profit margins will remain under pressure if cost pressures persist while demand recovery is limited,” RatingDog founder Yao Yu said.
Reading was better than one official survey Manufacturing activity unexpectedly contracted in January, coming in at 49.3 compared to 50.1 in the previous month, according to the Office for National Statistics.
RatingDog’s proprietary survey, which samples a smaller group of export-oriented manufacturers, painted a brighter picture than official surveys, which generally cover a broader range of firms.
NBS officials attributed this decline to seasonal slowdown and weakening global demand. According to local media reports, some Factories stopped production last month to allow employees to return home ahead of the upcoming Lunar New Year.
This year’s Lunar New Year holiday has been extended to nine days for the first time, running from Feb. 15 to Feb. 23, as Beijing aims to increase domestic spending on travel, tourism, catering services and leisure activities during the holiday.
The PMI data pair also provided an early look at how the world’s second-largest economy was performing at the beginning of this year. China’s economy met the government’s 5% growth target last year, boosted by strong exports as manufacturers increased shipments to non-U.S. markets due to higher U.S. tariffs.
But economists have warned of persistent deflationary pressures as retail sales slowed to the slowest pace in three years. Fixed asset investment also recorded its first annual decline in decades, contracting 3.8% last year; This was due to the deepening collapse in real estate and the fiscal constraints of local governments restricting investment.
