China's manufacturing activity softens due to seasonal weakness with encouraging trends

China's manufacturing activity eased in February due to seasonal disruptions from the Spring Festival holiday, yet still saw positive trends accumulating, official data showed Tuesday.

The manufacturing Purchasing Managers' Index (PMI) in February, released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing, came in at 49 percent, down 0.3 percentage points from January.

The extended Spring Festival holiday had a major impact on the fluctuation, an NBS official said.

"Influenced by the Spring Festival holiday as well as other factors, China's manufacturing PMI dropped in February, and the prosperity level of the manufacturing industry went down compared with January. Historical data shows that PMI readings in the Spring Festival month mostly tend to fluctuate. For this year, the extended Spring Festival holiday, which fell entirely in mid-to-late February, weighed on factory operations and overall market activity," said Huo Lihui, director of the Business Prosperity Division under the NBS.

Sub-indices showed both production and new orders moderated during the month, reflecting softer output and demand.

However, some sectors remained resilient. The production and new orders indices of agricultural and sideline food processing, as well as computer, communications, and electronic equipment manufacturing, stayed in expansion territory, with the production and demand in related industries maintaining an expanding trend. High-tech manufacturing continued to outperform other sectors, with a PMI indicator of 51.5 percent and marking a 13-month expansion. New orders and production indices in the sector remained above 51 percent and 54 percent, respectively, indicating steadily increasing demand and robust output growth.

"Growth in raw material prices slowed in February, while ex-factory prices for finished goods rebounded, helping improve corporate profitability. Business confidence also maintained an upward trend," said He Hui, vice president of the China Federation of Logistics and Purchasing.

The U.S. dollar strengthened in late trading on Tuesday.

The dollar index, which measures the greenback against six major peers, went up 0.67 percent to 99.046 at 15:00 (2000 GMT).

In late New York trading, the euro dropped to 1.1603 dollars from 1.1707 dollars in the previous session, and the British pound fell to 1.3334 dollars from 1.3422 dollars in the previous session.

The U.S. dollar bought 157.76 Japanese yen, higher than 157.23 Japanese yen in the previous session. The U.S. dollar increased to 0.7822 Swiss francs from 0.7784 Swiss francs, and it lost to 1.3667 Canadian dollars from 1.3673 Canadian dollars.

The U.S. dollar was up to 9.2882 Swedish Kronor from 9.1347 Swedish Kronor.