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China Manufacturing and Services PMI Soars in February Indicates Economic Recovery after Zero-Covid Cancellation

China’s National Bureau of Statistics (NBS) reported that the February manufacturing purchasing managers’ index (PMI) surged to 52.6, the fastest pace of growth since April 2012, from 50.1 in January. This indicates that the country’s economy is rebounding following the Chinese government’s announcement of the abolition of the zero COVID policy, which has boosted consumer confidence.

The data from the NBS also revealed that the February services PMI increased significantly to 56.3 from 54.4 in January, indicating the beginning of China’s economic recovery after the government canceled measures to control COVID-19.

An index above 50 indicates an expansion in China’s manufacturing and service sectors, and the recent PMI data suggests that the country’s economy is steadily recovering. Caishin/S&P Global surveys also showed that the February manufacturing PMI rose for the first time in seven months, supported by a rebound in manufacturing and new orders, as well as a recovery in demand among consumers following the cancellation of the zero COVID policy.

The February manufacturing PMI rose to 51.6 from 49.2 in January, beating analysts’ expectations of 50.2 in a Reuters poll. It marks the first time since July 2022 that the manufacturing PMI rose, and it is the highest level since June 2022, with an index above 50 indicating an expansion in China’s manufacturing sector.

China’s economy heavily relies on its manufacturing and services sectors, and the recent PMI data provides a positive outlook for the country’s economic recovery. With the Chinese government implementing measures to support its economy, including cutting taxes and increasing spending on infrastructure projects, the country’s economy is expected to continue its recovery in the coming months.

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