China’s February PMI points to expectation of significant increase in manufacturing activity in near term

3 Mar 2023 , 02:04 AM

China’s Purchasing Managers Index (PMI) in February stood at 52.60. This is an increase of 4.99% over its PMI level of 50.10 in January.  In December last year, its PMI level stood at 47. A value above 50 of PMI indicates to expansion in production & manufacturing activity over that in the previous month. A level below 50 indicates  contraction in manufacturing activity over that in the previous month. So in both January and February of 2023, manufacturing activity in China expanded. In December 2022 it had contracted. 

China Manufacturing Expected production and Business activities index for February stood at 57.50 . This was an increase of 3.42% over its value in January. This means that Chinese manufacturers are expecting significant increase in manufacturing activity in the near term. 

China Manufacturing New Orders Index in February stood at 52.40. This was an increase of 2.95% over its value in January. Manufacturers saw increase in new orders in the month of February. China Manufacturing Production activity saw an increase of 13.86% over its value in January. This means that production activity picked up sharply in February. 

China Manufacturing Raw Material Purchase Price Index in February increased month-on-month by 4.21%. This means that cost of raw materials also increased. Cost of raw materials goes up when production activity suddenly increases. Supply chain disruptions caused by Covid lockdowns and restrictions are also a significant contributor to increase in cost of raw materials. 

China Manufacturing Supplier Delivery Time Index increased by 9.24% to 52 in February. Suppliers are taking more time to deliver raw materials to Chinese factories. This is expected to lower the pace of production.  

China Manufacturing Employment Index in the month increased month-on-month by 4.99% to 52.60. Employment in the manufacturing sector also went up with more manufacturing activity in the month.