As we delve into the latest Purchasing Managers’ Indexes (PMIs) from China’s National Bureau of Statistics (NBS) for February 2025, it’s important to note the impact of the Lunar New Year holidays, which occurred from January 29 to February 12 this year. This seasonal factor tends to skew the data for both January and February, making the upcoming March results a better indicator of trends.
In February, the manufacturing PMI rose to 50.2, surpassing expectations and signaling a return to expansion. This uptick marks the highest reading in three months and is worth noting because it counters the one-month dip into contraction experienced in January. Although employment within the manufacturing sector remained below 50, it reached its peak in 22 months, showcasing a resilient workforce.
Turning to the Services PMI, which encompasses both the services and construction sectors, we recorded a reading of 50.4. This figure slightly exceeded the anticipated 50.3 and improved from the previous month’s 50.2. Overall, the Composite PMI stood at a robust 51.1.
Looking ahead, we anticipate next week’s release of the Caixin PMIs, which will provide further insights. The Caixin Manufacturing PMI is scheduled for Monday, March 3, while the Services PMI will follow on Wednesday, March 5, with both being released at 0145 GMT / 2015 US Eastern time.
When comparing the NBS and Caixin PMIs, several critical differences emerge. The NBS PMI is produced by the government-affiliated National Bureau of Statistics of China. It aligns closely with government priorities, covering a broad range of industries, including state-owned and larger enterprises.
On the other hand, the Caixin PMI, developed with S&P Global, focuses more on the private sector, especially small to medium-sized enterprises (SMEs). This PMI tends to capture the dynamics of companies exposed to market forces and less influenced by state interventions.
The NBS PMI typically surveys around 3,000 enterprises, emphasizing state-owned and larger companies, while the Caixin PMI surveys about 500 enterprises, highlighting export-oriented and technology-driven firms. The release of the NBS PMI usually happens at the end of each month, featuring separate readings for manufacturing and non-manufacturing sectors. Conversely, the Caixin PMI comes out a few days into the next month, focusing solely on manufacturing and services.
Analysts turn to the NBS PMI to understand the broader economic landscape, especially sectors influenced by policy. In contrast, the Caixin PMI is seen as a barometer for the health of the private sector, sensitive to global trade conditions.
Given these distinctions, each PMI serves a unique purpose. The NBS PMI offers a macroeconomic outlook of China’s economy, often reflecting policy-induced stability. Conversely, the Caixin PMI provides insights into the more volatile, market-driven segments, capturing real-time changes in demand and global shifts.
Investors and policymakers can gain a nuanced understanding of China’s economy by examining both PMIs. They represent complementary views that, together, paint a full picture of the country’s economic pulse and its underlying forces.
