China’s manufacturing sector recorded its most rapid growth in a year this March, with data from the National Bureau of Statistics released Monday showing that the official Purchasing Managers’ Index (PMI) rose to 50.5. The figure was consistent with Reuters’ forecasts.
This suggests that Beijing’s stimulus efforts are effectively supporting economic recovery, although impending U.S. tariffs pose a risk to continued growth.
In February, the PMI figure climbed to 50.2 after January’s contraction at 49.1, as manufacturing activities picked up following the Lunar New Year holiday.
For March, the production sub-index increased to 52.6, while new orders rose to 51.8, reflecting stronger manufacturing supply and demand. However, the employment index fell to 48.2, indicating a decline from the previous month.
According to Julian Evans-Pritchard, head of China economics at Capital Economics, the PMI data suggests a resurgence in infrastructure spending and resilience in exports despite U.S. tariffs.
Nonetheless, he noted that the Chinese economy is likely to slow in the first quarter compared to the final quarter of last year, citing weaknesses in the services sector and unfavorable base effects.
Additionally, the non-manufacturing PMI, encompassing services and construction, increased to 50.8, reaching its highest point in three months. Yet, the employment sub-index for non-manufacturing dropped to 45.8, indicating a weak labor market, with both services and construction sectors experiencing declines.
