(Yicai) March 3 -- Activity in China’s manufacturing sector climbed back into expansion territory in February, as businesses were swift to re-open following the eight-day Chinese New Year break and as the economy responds to a slew of stimulus measures. Non-manufacturing sectors, such as the construction industry and services sector, also rebounded.

The manufacturing purchasing managers’ index, which is a gauge of industrial profitability, climbed 1.1 percentage point last month from January to 50.2, according to data released by the National Bureau of Statistics on March 1. A reading above 50 indicates expansion and one below contraction.

The non-manufacturing PMI, which includes the construction industry and the services sector, advanced 0.2 percentage point in February from the previous month to 50.4, the NBS said. While the composite PMI output index, which is the weighted sum of the manufacturing production sub-index and the non-manufacturing PMI, gained 1 percentage point to 51.1.

The notable rebound in February’s manufacturing PMI, which is now back in positive territory, is due to seasonal factors like the Spring Festival break and shows that the ongoing government stimulus packages are taking effect, said Zhang Liqun, special analyst at the China Federation of Logistics and Purchasing. It is also an early signal that China’s economy may be bottoming out.

Over 60 percent of businesses are still reporting insufficient demand, meaning that weak demand remains a significant issue, Zhang said. China should boost counter-cyclical macro-economic policy adjustments and enhance government investment to help businesses secure more orders and further support economic recovery, he added.

A combination of effective policies and businesses getting back to work quickly after the holiday helped boost demand across the board, said Wen Tao, an expert at the China Logistics Information Center.

Existing policies, a raft of incremental stimulus measures and the implementation of directives made at the Central Economic Work Conference, which was held in December last year, have helped fuel an uptick in demand, he said.

Supply and demand should continue to grow, especially in new economic drivers, to propel high-quality economic development, Wen said.

Editor: Kim Taylor