BEIJING (Reuters – China’s factory activity is likely to have contracted in February because of slower production due to the Lunar New Year holiday, Winter Olympics and Beijing expecting to reveal more stimulus measures later this week.

According to the median prediction of 35 economists polled on Monday by Reuters, the official manufacturing Purchasing Manager’s Index is likely to fall to 49.9 (from 50.1 in January). Any reading lower than 50 indicates contraction.

Analysts concluded that upstream demand was likely to be affected by seasonality shifts from Lunar New Year timing changes, as well as production curbs during Winter Olympics and subdued activity in the property sector. Morgan Stanley According to a note from the NYSE, Friday’s announcement was made. According to them, the manufacturing PMI of National Bureau of Statistics will have fallen to 49.6.

At the end of January, Lunar New Year festivities lasted for one week. The Beijing Winter Olympics took places from February 4-20.

Capital Economics believes there will be some surprise in the data. Capital Economics points to loosening COVID-19 regulations as evidence that outbreaks have been contained.

The early indicators are indicating that the conditions have improved since February. Due to the fewer cases this month, most restrictions placed on port cities and industrial areas were lifted.

China’s economy began last year strong, having rebounded from the pandemic-related slump of previous years. The property market’s debt and stringent anti-virus policies, which have impacted consumers and their spending, caused momentum to fall.

All eyes will be on the March 5th annual meeting of the top legislative body, where the government will reveal its economic targets and possibly more stimulative measures.

The central bank cut benchmark lending rates in order to boost the economy and new bank lending was at an all-time high.

On Tuesday will be published the official PMI. This survey focuses heavily on state-owned and large companies.

A private Caixin manufacturing PMI also will be released on that day. Analysts predict that the headline reading will rise slightly from 49.1 to 49.3 in previous years.

Goldman Sachs analysts (NYSE:) stated that seasonality can cause a slight upward bias in the Caixin manufacturing PMI for February.