BEIJING, March 2 (Reuters) – China’s manufacturing activity probably shrank for a second straight month in February, a Reuters poll showed on Monday, suggesting factory owners are still struggling to turn a profit as weak domestic demand and investment offset resilient exports.
The poll of 27 economists forecast the official purchasing managers’ index (PMI) would fall to 49.1 from January’s 49.3, below the 50-point threshold that separates growth from contraction. The data is due on Wednesday.
The PMI broke an eight-month streak in negative territory in December, rising to 50.1, but spent most of 2025 in the doldrums.
The survey is seasonally adjusted to reflect factory shutdowns around the Lunar New Year holiday, which ran for a record nine days from February 15 to February 23 this year, but economists say the model is imperfect, meaning the widespread closures still skew the result.
Policymakers held off on fresh stimulus in the final quarter of 2025, confident the world’s second-largest economy would meet its official growth target of about 5% off the back of record exports and a drive to diversify away from the United States, in response to President Donald Trump’s tariffs.
But economists expect growth to stay weak in the first quarter of 2026 without further policy support.
They say steps such as targeted interest-rate cuts and further cuts in banks’ reserve requirements are unlikely to help boost growth, after similar easing measures delivered only limited gains since the end of the COVID-19 pandemic.
China’s Premier Li Qiang is expected to announce the official 2026 growth target at Thursday’s opening of the annual session of the national legislature.
Economists polled by Reuters in January forecast growth slowing to 4.5% this year and keeping that pace in 2027.
The Politburo, the Communist Party’s top decision-making body, pledged more proactive and effective economic policies last week, highlighting efforts to stabilise employment and boost domestic demand.
Xu Tianchen, senior economist at the Economist Intelligence Unit, forecast a reading of 49.6, citing faster resumption of work at construction sites than last year and better capacity utilisation at steel mills.
Policymakers are expected to make fresh pledges to curb overcapacity when Premier Li delivers the government’s work report and next five-year plan on Thursday, which will outline priorities for the coming year.
Xu said he expected the government to announce the phasing out of more industrial subsidies and introduction of price floors across more industries.
“‘Anti-involution’ is a multi-year project, so we’ll continue to see moves in that regard this year,” he added, using a term favoured in China to refer to aggressive price cuts.
(Reporting by Joe Cash; Polling Rahul Trivedi in Bengaluru and Jing Wang in Shanghai; Editing by Clarence Fernandez)
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