China’s manufacturing sector showed a strong rebound in March, with the Purchasing Managers’ Index (PMI) rising to 50.8 from 49.1 in February, according to data released by the National Bureau of Statistics (NBS) on Sunday. This marks the first expansion after five consecutive months of contraction, signaling a recovery in production and demand across the country.
A PMI reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 reflects contraction. The uptake in March suggests that Chinese enterprises are experiencing a resurgence in activity and hold an optimistic outlook for the coming months.
Zhang Liqun, a special analyst with the China Federation of Logistics and Purchasing, highlighted the significant rebound in the PMI. He attributed it to both seasonal factors and the overall recovery momentum of the macroeconomy. Zhang also noted that the various policies aimed at stabilizing growth and boosting market confidence are gradually taking effect.
Production and demand saw robust growth in March. The sub-index for production rose from 49.8 to 52.2, while the sub-index for new orders increased from 49.0 to 53.0. Among the 21 surveyed sectors, 15 were in the expansion zone—an increase of 10 sectors compared to the previous month—as enterprises ramped up production after the Spring Festival holiday.
Senior NBS statistician Zhao Qinghe commented on the increased market activity, noting that the acceleration in work resumption after the Chinese New Year has significantly boosted the market. He also mentioned that efforts in equipment renewal have injected vitality into the market, though policies and measures need further detailing.
Foreign trade also showed improvement, with companies in the chemical fiber, automobile, and communication device sectors reporting better foreign trade business compared to the previous month. Exports and imports were a bright spot for the manufacturing sector.
Enterprises of varying sizes experienced improvements. Small enterprises saw their PMI return above the boom-and-bust line for the first time in 12 months, while the PMI for large enterprises rose to 51.1 from 50.4. Cai Jin, vice-president of the China Federation of Logistics and Purchasing, stated that the PMI readings above 50 for companies of all sizes reflect strengthened coordination in China’s economic development.
The non-manufacturing sector also continued its growth momentum, with the PMI rising to 53.0 in March from 51.4 in February. This growth was driven by expansions in both the services and construction sectors. Notably, the postal service, telecommunications, and monetary and financial services sectors saw rapid growth, with activity indexes exceeding 60 points.
Despite the positive trends, experts cautioned about challenges facing enterprises, including increasing market competition and insufficient demand. Zhao Qinghe called for promoting the implementation of policies such as large-scale equipment upgrades and trade-ins of consumer goods to provide solid support for the growth of China’s manufacturing sector.
Cai Jin expressed optimism, noting that the sound development of both the manufacturing and non-manufacturing sectors, and their interaction, will promote China’s economy to further rebound and improve.
Reference(s):
China's manufacturing activity expands in March, official PMI shows
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