On March 1, 2026, a cargo ship is anchored at the berth of Lianyungang Port Container Terminal in Jiangsu Province, China, loading and unloading containers.
Photo | Future Publishing | Getty Images
An official survey on Wednesday revealed that Chinese factory activity slumped in February as manufacturers suspended production and cargo shipments to celebrate the long holiday.
The official manufacturing purchasing managers index fell to 49 in February, lower than economists’ expectations of 49.1, the Office for National Statistics said. Measurements below 50 indicate contraction, and levels above that threshold indicate expansion.
This is the second negative month in a row, bringing the PMI reading in line with October 2025 and April 2025 levels. The official PMI stood at 49.3 in January, after briefly recovering in December.
The composite PMI, a broad measure that tracks activity across manufacturing and services, fell to 49.5 from 49.8 in January, official data showed.
The non-manufacturing PMI, which covers services and construction, fell 0.1 point to 49.5.
The nine-day Lunar New Year holiday saw an increase in travel, entertainment activities and duty-free shopping, according to preliminary official statistics. This year’s holiday, from February 15 to February 23, was the longest on record, as Chinese authorities sought to boost consumer spending.
The world’s second-largest economy has struggled to eliminate deflationary pressures since the end of the pandemic, weighed down by a prolonged real estate downturn and a weak outlook for the job market.
The Chinese government is scheduled to announce a series of economic targets in parliament on Thursday. Economists had largely expected policymakers to lower their growth target this year to a range of 4.5% to 5% from the “around 5%” target for the past three years.
