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China’s factory activity rise at fastest pace in over a year
Business confidence reached its highest in 11 months.
China’s manufacturing activity rose for the fourth month running in March, expanding at the fastest pace in 13 months on the back of strong new orders both at home and abroad, an industry survey showed
The headline Caixin/S&P China general manufacturing purchasing managers’ index (PMI) rose to 51.1 last month from 50.9 in February, signaling a sustained improvement in the overall health of the sector as the reading stayed above the 50 neutral mark, which separates expansion from contraction.
Chinese manufacturers ramped up production to keep up with the increasing demand with new orders rising both domestically and overseas. Notably, new export orders rose at the fastest clip in more than a year.
This pushed companies to boost their purchasing activity as well to meet current as well as future demand. The average input costs, meanwhile fell for the first time since last July largely due to lower costs of raw materials.
Despite improving operations, job shedding continued in Chinese factories with resignations still ongoing and companies remaining conservative with their hiring to rein in expenses.
Chinese manufacturers also grew more optimistic last month, expecting factory activity to benefit from the improving macroeconomic outlook.
“The economic performance in the first two months of this year was better than expected, while the Caixin manufacturing PMI has remained in expansionary territory for five consecutive months. This indicates a generally stable and positive economic recovery,” said Wang Zhe, senior economist at Caixin Insight Group.
