This is the first concrete sign of recovery in China. Factory activity in February saw its strongest monthly expansion in a decade, following the end of anti-Covid restrictions, according to official figures released on Wednesday.
Many businesses, restaurants and production sites have been crippled for three years by repeated confinements and travel restrictions to fight the pandemic.
The sudden lifting of these restrictions in early December triggered an economic recovery, weighed down, however, by a massive wave of Covid cases in the weeks that followed, and by the Lunar New Year holidays in January. But manufacturing activity improved significantly in February.
The Purchasing Managers’ Index (PMI), a reflection of the health of the industrial world, stood last month at 52.6 points against 50.1 in January, announced the National Bureau of Statistics (BNS). A figure above 50 indicates an expansion in activity, and below that indicates a contraction. It had not been so high since 2012.
Analysts polled by the Bloomberg agency also expected an increase, but much less marked (50.6). “With the easing of the effect of the holidays (…) and the repercussions of the epidemic, the resumption of production of manufacturing enterprises has accelerated and demand has continued to climb,” said Zhao Qinghe, statistician. of the BNS.
Factories have traditionally struggled to bring some of their workers back after the holidays during this time of year and they need time to adjust to running at full capacity again.
Employment on the rise
“The solidity of the PMI index confirms that the economic recovery is on the right track”, analyzes Zhiwei Zhang, from Pinpoint Asset Management. “The strong rebound in domestic demand could lead to inflationary pressure” but this should “fade after a few months” and “should not be a concern for the global economy”.
The independent PMI index, published on Wednesday by the IHS Markit firm for the Caixin media group, also confirms this upturn in manufacturing activity. It stood at 51.6 points in February, compared to 49.2 points the previous month. According to the study, employment has increased, the pressure on supply chains has eased and delivery times have improved as they have not for eight years.
5.2% growth according to the IMF
“It is likely that the high levels of the PMI indices will fall soon, as the pace of the recovery slows”, however tempers Julian Evans-Pritchard, economist at the firm Capital Economics. “Nevertheless, they underline how quickly activity rebounded after the reopening” and “the latest data suggests that even our 5.5% growth forecast” for 2023 “may prove to be too conservative”, underlines t- -he.
The International Monetary Fund (IMF) recently raised its growth forecast for the world’s second largest economy to 5.2% this year. More clues about China’s economic health are expected to be revealed on Sunday when the annual session of the National People’s Congress, China’s parliament, opens.
Prime Minister Li Keqiang will present in a speech the last government report of his mandate and will detail the main economic objectives for the year.