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Andrew Mullen

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1. ‘Substantial’ manufacturing increase
China’s official manufacturing purchasing managers’ index (PMI) returned to expansion in March, hitting a one-year high of 50.8, up from 49.1 in February.
The figure beat market estimates of 49.9 and landed above the watershed level of 50, an indication of expanding activity ending five consecutive months of contraction.
The reading was the highest since March last year, when the gauge stood at 51.9.
Under the official manufacturing PMI, the new-orders subindex rose to 53 in March from 49 a month earlier.


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The new manufacturing export order subindex also jumped to 51.3 in March from 46.3 in February, indicating an expansion in foreign demand.
Meanwhile, the Caixin/S&P Global manufacturing PMI also rose to 51.1 in March from 50.9 the previous month.
Expansion in manufacturers’ output and new orders accelerated last month, while external demand also picked up, pushing the gauge for new export orders to its highest level since February 2023.
Businesses’ confidence for the year ahead rose to its highest point since April 2023, but companies were cautious about adding employees, with the subindex remaining negative since August.
China’s factory activity hits 1-year high in latest sign of economic recovery
“We think it makes sense to average across both PMIs to gauge conditions in industry. On this basis, the headline manufacturing reading increased substantially from 50 to 51,” said analysts at Capital Economics.
“The breakdown shows a sizeable increase in the output component. And export orders rose to a 13-month high, pointing to improved external demand.
“The overall new orders component also climbed to its highest level since April, suggesting some improvement in domestic demand, too.”
2. Services continue to expand
China’s official non-manufacturing PMI – a measure of sentiment in the service and construction sectors – rose to 53 in March from 51.4 in February, rising for the fourth straight month.
Within the non-manufacturing PMI, the subindex for the construction sector rebounded to 56.2 in March from 53.5 in February, while the service sector business activity index climbed to 52.4 from 51.


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Meanwhile, the Caixin/S&P Global services PMI rose to 52.7 in March from 52.5 in February.
The pace of new business expansion was the fastest since December due to improving underlying demand and efforts to boost new orders.
3. Composite PMIs hit highest levels since May
China’s official composite PMI – a combination of manufacturing and non-manufacturing indices – rose to 52.7 in March from 50.9 in February, reaching its highest level since May.
And taken with the upbeat Caixin manufacturing PMI, the Caixin/S&P’s composite PMI rose to 52.7 last month from 52.5 in February, also hitting its highest reading since May.
“Growth in supply and demand in both the manufacturing and services sectors accelerated slightly, with improved exports and sustained market optimism. However, employment in both sectors continued to contract, while input and output prices remained low, indicating that sluggish demand persisted,” said Wang Zhe, senior economist at Caixin Insight Group.
4. Economy likely to slow again as policy support eases
The PMI data in March provided more evidence that parts of China’s economy are gaining momentum in the first quarter.
The readings followed better-than-expected headline economic indicators for the first two months of the year, including exports, retail sales and fixed-asset investment.
But analysts cautioned the increases could be a temporary bump from stimulus policies, with economist Sarah Tan at Moody’s Analytics saying that it was “too soon to let our guards down”, and that “for now, we will take March’s PMI improvement as a win”.
Either way, they add to wider evidence of a stimulus induced pickup in activity
Capital Economics
“The sizeable rises in the PMIs in March are consistent with improved economic momentum and/or the easing of sentiment effects that have weighed on the surveys recently,” said analysts at Capital Economics.
“Either way, they add to wider evidence of a stimulus induced pickup in activity. We think this recovery will continue in the near-term, but won’t prove durable and that the economy will be weakening again by year-end.”

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Can the green shoots of China’s economic recovery be sustained? 4 takeaways from March’s manufacturing, services data

China’s official manufacturing purchasing managers’ index (PMI) returned to expansion in March, while the Caixin/S&P Global gauge for factory activity also rose last month. Photo: AFP

China’s official non-manufacturing purchasing managers’ index rose for the fourth straight month in March, while the Caixin/S&P Global gauge also rose last month. Photo: EPA-EFE

China’s factory activity expands at fastest pace in 13 months, but ‘too soon to let our guards down’ for economic recovery

China’s Caixin/S&P Global manufacturing PMI – which focuses on smaller firms and coastal regions and includes a number of exporters - edged up to 51.1 from  50.9 in February. Photo: AFP

China’s SMEs match modest manufacturing gains, but yet to show ‘strong rebound trend’

The CKGSB Business Conditions Index rose from 51.6 in February to 52.1 in March, according to data published by the Cheung Kong Graduate School of Business (CKGSB) on Monday. Photo: EPA-EFE

The CKGSB Business Conditions Index rose from 51.6 in February to 52.1 in March, according to data published by the Cheung Kong Graduate School of Business (CKGSB) on Monday. Photo: Bloomberg

China’s services activity growth speeds up in March as new business rises at quickest pace in 3 months

China’s Caixin/S&P Global services purchasing managers’ index (PMI) rose to 52.7 from 52.5 in February. Photo: Bloomberg

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Illustration: Henry Wong

China’s factory activity hits 1-year high, adding to signs economic recovery is picking up pace

Employees work at an LED display factory in eastern China’s Jiangsu province on March 28. Photo: AFP

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Official manufacturing purchasing managers’ index (PMI) returned to expansion in March, while the Caixin/S&P Global gauge for factory activity also rose
The official non-manufacturing PMI rose for the fourth straight month in March, while the Caixin/S&P Global gauge also increased


China’s purchasing managers’ indices in March provided more evidence that parts of the economy are gaining momentum in the first quarter, but analysts remained cautious about a long-term recovery.


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Explainer | Can the green shoots of China’s economic recovery be sustained? 4 takeaways from March’s manufacturing, services data

Official manufacturing purchasing managers’ index (PMI) returned to expansion in March, while the Caixin/S&P Global gauge for factory activity also rose The official non-manufacturing PMI rose for the fourth straight month in March, while the Caixin/S&P Global gauge also increased

1. ‘Substantial’ manufacturing increase

Official manufacturing purchasing managers’ index (PMI) returned to expansion in March, while the Caixin/S&P Global gauge for factory activity also rose

The official non-manufacturing PMI rose for the fourth straight month in March, while the Caixin/S&P Global gauge also increased