China’s manufacturing sector has recorded its strongest growth rate in over five years in February, according to the latest PMI report.
The headline PMI, released by RatingDog and S&P Global, rose to 52.1 in February, up from 50.3 in January. This indicates the sharpest overall expansion since December 2020 and marks the country’s third consecutive month above the 50.0 growth threshold.
According to the report, the current rate is due to a significant increase in output, stocks of purchases, and new orders, particularly in exports. The overall PMI increase was partially offset by faster supplier delivery times, while employment figures remained broadly neutral.
Despite notable growth in production orders, RatingDog says Chinese manufacturers remained cautious about hiring new workers. Employment rose only slightly for the second consecutive month, but still marked the first back-to-back increase since mid-2021.
Costs also saw a significant increase in February as new orders drove up demand for raw materials. Input prices increased at the fastest rate since June 2022, with survey participants specifically noting higher metal costs.
Despite this acceleration, price inflation remained lower than the historical average observed since the survey began in 2004. In response to these higher costs, manufacturers increased their selling prices for the second consecutive month.
The report also revealed that optimism among Chinese manufacturers improved considerably, with business confidence reaching its highest level in 11 months.
Companies attributed this to strengthening market demand, installation of new production lines and improvements in both production capacity and efficiency.
Yao Yu, founder at RatingDog, said the February data shows “a strong expansion driven by robust supply and demand, with a notable external demand rebound.”
“Looking ahead, the sustainability of this momentum depends on persistent demand and whether confidence translates into more active hiring and investment,” Yu noted.
Yu predicted that the manufacturing PMI would maintain a moderate expansionary trend in the short term.
