China’s factory employment is growing at the fastest pace in more than 5 years, private PMI shows
Written by Ellen Zhang and Ryan Woo
BEIJING, March 4 (Reuters) – China’s industrial activity in February expanded at its fastest pace since December 2020, driven by strong demand that helped lift manufacturers’ confidence, a private sector survey showed on Wednesday.
The RatingDog China General Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 52.1 in February from 50.3 in January, easily beating analysts’ forecasts of 50.2 and marking the highest level in more than five years. 50 marks separate growth from contraction.
The result was compared to an official survey released earlier in the day that showed factory activity contracted for the second month in a row in February.
Analysts say differences in survey coverage and respondent profiles often contribute to disparate readings.
Demand for manufactured goods in China strengthened in February, a private survey showed, with the volume of new orders rising for the ninth straight month and at the fastest rate since December 2020. That boosted output growth to the strongest on record since June 2024.
Overseas demand increased significantly, with new orders for shipments rising at the fastest pace since September 2020.
A furniture exporter based in eastern China said on condition of anonymity that due to the development of overseas procurement and warehouses, their orders increased by 30%-40% in January from last year, while February orders continued to grow.
The manufacturing PMI is expected to maintain a moderate expansion trend in the short term, said Yao Yu, founder of RatingDog.
“Looking ahead, the sustainability of this momentum depends on continued demand and confidence translating into active hiring and investment.”
Economists say that China will benefit from the decision of the US Supreme Court against President Donald Trump’s emergency tariffs imposed last year, as the reduction of the tax gap with other countries can give it some benefits.
The office of the US Trade Representative said on Monday that the country will seek to manage bilateral trade with China for better balance and fairness and to monitor Beijing’s compliance with the trade agreement reached last year.
Chinese manufacturers were more optimistic about their future output in February, with overall sentiment at an 11-month high, an S&P survey showed.
Although backlogs arose in February when many factories sent workers home for Chinese New Year, manufacturers remained cautious in hiring. Hiring rose only slightly in the second month, but this marked the first consecutive increase since mid-2021.
