A worker works on a production line to produce dry granulators, which will be supplied to drug manufacturers in Shanghai and other cities to help combat the novel coronavirus, at Wanshen Pharmaceutical Machinery Co., Ltd. in Yichun, east China's Jiangxi Province, Feb. 24, 2020. The government of Yichun has coordinated with the company to ensure the production at full capacity amid epidemic prevention and control efforts. (Photo by Zhou Liang/Xinhua)

China's Caixin manufacturing purchasing managers' index (PMI), a gauge of China's small and medium-sized manufacturing activity, hit a historic low of 40.3 in February amid the coronavirus epidemic. The index, falling in the contraction range, slipped 10.8 points from January.

The expected figure for February was 46. The February reading was even lower than 40.9, the Caixin manufacturing PMI recorded in November 2008 when the global financial crisis broke out. 

The Caixin manufacturing PMI survey was first launched in April 2004. 

The new order index plummeted to an unprecedented low in February, according to the survey. New export orders also dropped "drastically" in the same month due to logistics hurdles and order cancellations from foreign clients. 

The slumping index is the result of a near standstill among small and medium-sized enterprises (SMEs) in February, as Chinese firms postponed their reopening dates due to coronavirus concerns, industry insiders said. 

While such delays inevitably eroded their profitability, some SMEs told the Global Times that they are more concerned about keeping their foreign clients on hold. Some worried that clients may turn to manufactures in other countries if shipments are not delivered on time.   

The results of the private survey also underscore a slew of challenges faced by SMEs, from a labor shortage issues and supply chain disruptions to reduced stockpiles of raw materials. 

Indexes measuring employment in China's manufacturing industry and supply delivery time both dropped to historic lows, according to the Caixin survey. 

The results are in line with China's official manufacturing PMI, which came in at 35.7 in February, also the lowest in history. PMI readings above 50 indicate expansion, while those below that level signal contraction.

But economists forecast that as the epidemic shows sign of abating in China and as economic activities gradually return to normal, PMI will bounce back significantly in March and through the rest of the year.

The survey also revealed that Chinese manufacturers' optimism about production over the next 12 months has jumped to a five-year high.

About 97 percent of top 500 Chinese manufacturers have thus far resumed production, according to a report issued by the China Enterprise Confederation over the weekend.