The growth of factory activities in China will reach a height of three months in February.

Factory activities in China expanded to 50.8 in February at its fastest pace in three months. A private sector investigation was presented on Monday. This is because millions of migrant workers returned to work after an extended monthly holiday.

The seasonally adjusted purchasing manager index for Caixin/S&P Global Manufacturing broke Reuters’ voting forecast of 50.3, accelerating from 50.1 and 50.5 last December.

Private sector manufacturing PMI has exceeded the 50 threshold separating expansion from contraction since last October.

Readings from this private investigation on Monday also showed China’s February factory activities have expanded at the fastest pace since November, following the officially manufactured PMI released on Saturday.

According to the National Bureau of Statistics, the official PMI rose from 49.1 in January to 50.2 in February. Non-manufacturing PMI, including services and construction, also rose to 50.4 from 50.2 in January.

The figure comes when economists flagged the fresh US tariffs that could put pressure on manufacturing activities in the country, which accounted for a quarter of China’s GDP last year, and could stop the role of exports as a key driver of growth this year.

According to a survey on Monday in February, the new export orders rose at the fastest speed since April last year, as “demand has been strengthened from foreign customers.”

The stronger external demand for China’s manufactured goods could be due to US importers continuing to carry out tariffs before and after in anticipation of even higher collections, China economist in capital economics Zichun Huang said in a memo.

Last week, US President Donald Trump announced that he would impose an additional 10% tariff on Chinese products. In addition to the 10% he taxed China on February 4th, Trump threatened a 60% tariff in China on the trajectory of his campaign.

Additional tariffs are expected to come into effect on March 4th, coinciding with the famous annual rally in Beijing, where Chinese authorities are expected to announce their 2025 economic targets.

While attention is now being paid to potential measures from Beijing, investors are also awaiting government details on a wide range of stimulus plans to support the slow economy, including increased domestic demand and increased fiscal spending to dodge sustained disinflation pressures.

The combination of financial support and “the tariff frontline” helped China’s economy regain some momentum in February, but overall growth this quarter is likely to slow down, Capital Economics said.

“Unless leadership reveals more stimuli than expected in the National People’s Assembly, it’s difficult to see how this year’s slowdown can be avoided,” Huang said.

Production prices at factories are under pressure as domestic consumption is suffering from shortages. In particular, consumers and investment goods experienced a sharper price drop, according to a survey on Monday.

If we narrow that profit margin further, the costs for copper and certain chemicals are higher, according to the study.

Jobs in the manufacturing sector also fell to nearly five years’ lows as manufacturers continued to prioritize cost reductions, particularly among consumer goods producers.