China's manufacturing activity softens, business sentiment stays upbeat

The purchasing managers' index (PMI) for China's manufacturing sector fell to 49.3 in January as some industries entered a traditional seasonal lull and effective market demand remained insufficient, official data showed on Saturday.

This figure was down 0.8 percentage points from the previous month. A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

Despite the overall contraction, factory output continued to expand. The sub-index for production stood at 50.6, indicating steady growth in manufacturing activity. However, the new orders index dropped to 49.2, pointing to a slowdown in market demand.

By sector, production and new orders indices in industries like agricultural and sideline food processing, as well as railway, shipbuilding and aerospace equipment manufacturing, were all above 56.0, reflecting relatively strong supply and demand.

"For different industries, the production index and new order index of industries such as the processing of food from agricultural and sideline products and the manufacture of railway, ship and aerospace equipment are all above 56 percent, showing a relatively quick release in both production and demand," said Huo Lihui, director of the Business Climate Survey Division of the Service Survey Center under the National Bureau of Statistics (NBS).

High-tech manufacturing remained a bright spot, with its PMI at 52.0, marking a second consecutive month above what is considered a relatively strong level. Equipment manufacturing PMI stood at 50.1 in January, also indicating expansion. Meanwhile, PMIs for consumer goods and high energy-consuming industries dropped to 48.3 and 47.9, respectively.

Business sentiment stayed upbeat, with the index for production and business activity expectations at 52.6, still in expansion territory. Industries such as agricultural and sideline food processing and food and beverage manufacturing posted readings above 56.0 for a second straight month, underscoring strong confidence in near-term prospects, the data revealed.

The PMI for China's non-manufacturing sector came in at 49.4 in January, down 0.8 percentage points from the previous month.

"The service sector remained generally stable, with (the Business Activity Index for) the financial industry staying in the high expansion range of over 65 percent," said He Hui, vice president of the China Federation of Logistics and Purchasing (CFLP).

China's manufacturing activity softens, business sentiment stays upbeat

Spain is seeing a surge in European tourists as conflict in the Middle East prompts travelers to opt for closer and safer destinations.

With Easter holiday underway, Palma de Mallorca airport has been packed with visitors who abandoned plans for trips eastward. Hostilities triggered by Israeli‑U.S. strikes on Iran have forced major airports across the Middle East to cancel or delay flights, severely disrupting aviation and tourism in the region.

"We were thinking about going to Dubai, but because of the war, there was no option, so we came here to Mallorca," said a traveler named Michelle, who works as a kindergarten teacher.

"We thought about going to Thailand, but I see the flights were disrupted and they said there were drones and things like that, so we thought Spain may be a safer option," another traveler Ross McGrego said.

"The situation in the Middle East is a little bit too unstable for my holiday plans," said traveler Rose Danaher, a rabies specialist nurse with the UK Health Services Agency.

The influx has brought new opportunities for local businesses. Local restaurant owner in Mallorca Victoria Amoros opened her second restaurant just days ago.

"50,000 people extra are flying to Mallorca. These people were supposed to fly to the Middle East and they are rerouted to Mallorca. I don't know how we are going to handle that, but we will receive them with love," said Amoros, owner of La Malvasia Restaurant Chain.

Chris Pomeroy, the global head of tourism of international communications group Hopscotch said people all over the world are choosing to holiday closer to home.

"So, 14 percent of international travel goes through the Middle East, it's a connectivity issue. So, when these bridges are down, the logical effect is that people will stay in their hemisphere. We say in tourism that when in times of conflict, investors turn to gold, and in times of conflict, tour operators turn to Spain," he said.

Spain welcomed a record 97 million foreign tourists in 2025, and industry experts say the figure could surpass 100 million this year. With Middle East routes disrupted, Spain's role as Europe's fallback destination is set to grow even further.

Spain tourism surges as Europeans opt for safer holidays amid Middle East conflict