China Caixin PMI manufacturing rose to 50.8 in March, up from 49.9 and beat expectation of 50.0. The reading is back in expansionary region and is the highest since July 2018. Markit noted that production and total new work both increase at quicker rates. Also, employment expands for first time in over five years.
Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:
“The Caixin China General Manufacturing PMI came in at 50.8 in March, up from 49.9 in the previous month, indicating a notable improvement in the manufacturing industry.
“The subindex for new orders climbed to its highest level in four months, and the gauge for new export orders returned to expansionary territory, showing that both domestic and external demand rebounded moderately.
“The output subindex continued to rise in expansionary territory. The employment subindex surged to a high not seen since January 2013. Data from the National Bureau of Statistics showed that the surveyed unemployment rate in urban areas for February was the highest since early 2017, causing concerns about the job market. The situation improved significantly in March, indicating easing pressure on employment.
“The measure for stocks of finished goods rebounded in March from the previous month’s near-three-year low, but remained in contractionary territory. The subindex for stocks of purchases returned to expansionary territory, pointing to manufacturers’ increasing willingness to restock. The subindex for suppliers’ delivery times picked up despite staying below 50, indicating an accelerating capital turnover at companies.
“Both gauges for input costs and output charges edged up in to positive territory, with the latter posting a higher reading than the former, reflecting lower pressure from raw material costs. The producer price index might have risen faster year-on-year in March, and increased month-on-month, compared with a monthly decline in February.
“Overall, with a more relaxed financing environment, government efforts to bail out the private sector and positive progress in Sino-U.S. trade talks, the situation across the manufacturing sector recovered in March. The employment situation improved greatly.”
