China's Manufacturing Surveys Show Expansion In Place Since May Continues

Factories in China slowed in February as Lunar New Year holidays cut output though they kept a pace of expansion in place since coronavirus lockdowns eased in May of last year.

The Caixin/Market manufacturing Purchasing Manager's Index (PMI), which surveys mainly private firms, slipped to a nine-month low of 50.9 in February from 51.5 in January. The rate of expansion was the slowest since the recovery started in May.

On Feb. 28, the official China manufacturing PMI for February, which surveys major state-owned companies, slipped to 50.6 from 51.3 in January. A figure above 50 in both surveys denotes expansion.

In the Caixin survey, Chinese manufacturers confidently expected industrial output would increase over the next 12 months, for the second-highest sentiment reading in six-and-a-half years.

"The confidence [from Chinese manufacturers] mainly came from the accumulation of the experience in fighting the pandemic over the past year, as well as the expectation that winter COVID-19 flare-ups were coming to an end," Caixin Insight Group Senior Economist Wang Zhe said.