Manufacturing activity in the United Kingdom took an unexpected swan-dive last month. The purchasing managers index (PMI) compiled by Markit and CIPS fell to 47.9 in February. It was supposed to come in at 51.0. (A figure below 50 signals a contraction.)
But not so fast, everybody. At least part of this lower manufacturing activity was due to a weeklong holiday in China celebrating Lunar New Year, which took place in early February, says Chris Williamson, Markit’s chief economist.
“A significant number [of companies surveyed] were saying that because of China factory closures their exports were affected and their imports of raw materials were down,” Williamson tells Quartz.
The Chinese New Year, the date of which varies each year, gives rise to the world’s largest annual human migration and always means a certain amount of lost productivity, as workers in China and other parts of Asia, travel home for a week or longer. Companies that manufacture in China typically deal with this by rushing goods to market before and right after the holiday, causing delays and shortages throughout the supply chain, according to Diana Maure of Lilly & Associates International, a transportation and logistics company.
Moreover, the UK is not alone, says Markit’s Williamson—and the disruptions are only getting worse.
“The Chinese New Year holidays are having an increasingly disruptive impact on global trade flows as each year goes by…data from other countries are increasingly being affected by Chinese New Year and you can see it in things like German export data and US data as well.”
And that means it’s probably best to keep some grains of salt handy when more February PMI data comes out next week.