China's factory activity expands at a slower pace in February, misses expectations: official PMI
BEIJING (Reuters) - China's factory activity grew more slowly than a month earlier in February, hitting its lowest level since last May and falling short of market expectations after brief disruptions related to COVID-19 earlier in the year.
The official purchasing managers' index for manufacturing (PMI) fell to 50.6 from 51.3 in January, data from the National Bureau of Statistics (NBS) showed on Sunday, and stayed above the 50-point mark, growing from contraction separates.
Analysts had expected a decline to 51.1.
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Chinese factory activities usually rest during the New Year break when workers return to their hometowns. This year, the government appealed to workers to stay on the ground to help contain the spread of COVID-19.
In general, China's economic recovery has picked up on robust exports, pent-up demand and government incentives.
The official PMI, which mainly focuses on large and state-owned companies, showed the sub-index for new export orders in February was 48.8, compared to 50.2 in January, and after months boosted by overseas demand, went back again.
A sub-index for small business activity was 48.3 in February compared to 49.4 in the previous month. Smaller businesses have been harder hit by the seasonal effects of the Lunar New Year, Zhao Qinghe, an NBS official, said in comments released with the data.
An employment sub-index in the official PMI was 48.1 in February versus 48.4 in January as companies laid off more workers and faster.
Still, some manufacturing companies are seeing increasing pressure from rising labor costs and labor shortages, Zhao said.
China's factory gate prices rose for the first time in a year in January from a year earlier as months of strong manufacturing growth drove up raw material costs.
China recorded economic growth of 2.3% last year. This year, the government may avoid setting a growth target because it fears provincial economies will come under pressure to borrow more, political sources previously told Reuters.
China will increase political support for foreign trade and ensure the smooth operation of supply chains, its new trade minister said earlier this week.
In the service sector, activity increased for the eleventh year in a row, but at the slowest rate in a year.
(Reporting by Gabriel Crossley; Additional reporting by Colin Qian; Editing by Christopher Cushing)
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