Employees work on a carbon fiber production line in Zhongfu Shenying, Lianyungang, Jiangsu Province, eastern China, July 31, 2025.
Stra | AFP | Getty Images
China’s factory activity accelerated in January as manufacturers accelerated production and brought forward cargo ahead of the extended Lunar New Year holiday, according to a private survey released Monday.
The ratings dog China Comprehensive Manufacturing PMI (seasonally adjusted) surveyed by S&P Global rose to 50.3 in January from 50.1 the previous month, matching the 50.3 expected by analysts polled by Reuters. A value above the indicator 50 indicates expansion, and a value below it suggests contraction.
This was the highest level since October, when the privately surveyed PMI stood at 50.6.
Production accelerated last month as new orders at home and abroad increased, prompting companies to hire additional staff to cope with increased workloads and clear backlogs of orders.
The total amount of new orders increased for the eighth consecutive month, while new export orders recovered, supported by increased demand from overseas buyers, mainly in Southeast Asia.
However, according to a private survey, business confidence has fallen to its lowest level in nine months as companies worry about rising costs. Corporate expenses expanded at the fastest pace in four months, and factory prices rose for the first time since November 2024.
Metal prices in particular soared during the latest survey period, with input cost inflation reaching its highest level since September last year, the survey showed.
“Going forward, if demand recovery is limited and cost pressures continue, profit margins will remain under pressure,” said Yao Yu, founder of RatingDog.
The figure was better than an official survey released on Saturday, which showed manufacturing activity contracted unexpectedly in January to 49.3, compared with 50.1 the previous month, the Office for National Statistics said.
Although RatingDog’s private surveys sample a small group of export-oriented manufacturers, they generally paint a brighter picture than official polls that cover a broader range of companies.
NBS officials attribute the recession to a seasonal economic slowdown and weak global demand. Local media reported that some factories halted production last month to allow employees to return home ahead of the upcoming Lunar New Year.
This year’s Spring Festival holiday will be extended to nine days from February 15 to February 23 for the first time, with the Chinese government aiming to boost domestic spending on travel, tourism, food services and leisure activities during the holiday.
The two PMI data also provided an early glimpse into how the world’s second-largest economy fared earlier this year. China’s economy hit the government’s 5% growth target last year, helped by strong exports as manufacturers ramped up shipments to markets outside the U.S. in response to U.S. tariff hikes.
But economists warn that deflationary pressures will continue, with retail sales falling to their slowest pace in three years. Fixed asset investment also recorded its first annual decline in decades, falling 3.8% last year as the deepening real estate recession and local government fiscal constraints curtailed investment.
