(Sharecast News) - China's economy showed firmer momentum in February as manufacturing activity accelerated to a three‑year high and services steadied on holiday‑driven demand.
China's factory sector strengthened in February, with the RatingDog China general manufacturing purchasing managers index rising to 52.1 from 50.3 - its highest level since late 2020 and a third straight month of expansion.
Output growth hit its fastest pace since mid‑2024, while new orders rose for a ninth consecutive month, and foreign demand posted its sharpest increase since September 2020.
Backlogs continued to build and employment edged higher for a second month, marking the first back‑to‑back rise since mid‑2021, while buying activity accelerated at the quickest rate since November 2024, helping lift input inventories as supplier delivery times shortened slightly.
Input cost inflation picked up to its highest level since June 2022, driven partly by higher metal prices, while output prices rose at a 15‑month high. Business confidence climbed to an 11‑month peak on expectations of firmer demand and improved capacity.
"Overall, February's data show a strong expansion driven by robust supply and demand, with a notable external demand rebound," said Yao Yu, RatingDog founder.
Elsewhere, China's services sector also showed a modest improvement last month, with the official non‑manufacturing PMI edging up to 49.5 in February, a 0.1‑point rise from January, according to the National Bureau of Statistics.
Activity in accommodation, catering, entertainment and tourism surged on the back of the Spring Festival holiday, with all related indices above 60. Retail and air transport also strengthened, with readings above 50 and 55, respectively.
"In terms of market expectations, the services business activity expectation index remains in the high expansion range above 55%, indicating an optimistic outlook among service companies amid recent market developments," said Huo Lihui, director of the Business Climate Survey Division of Service Survey Center under the NBS.
Reporting by Iain Gilbert at Sharecast.com