China: Manufacturing PMI rebounds strongly in March on policy support
April 1, 2016
The Purchasing Managers’ Index (PMI) in March rebounded from February’s multi-year low of 49.0% to 50.2%, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP), which publish the index. The print overshot the 49.3% that market analysts had expected and represented the highest reading in nine months. As a result, the PMI is now sitting above the 50%-threshold that separates contraction from expansion in the manufacturing sector.
March’s reading reflected a broad-based improvement as all the main components of the index gained ground compared to the previous month. The all-important production gauge rebounded from February’s over-seven-year low, while new orders rose to the highest point since October 2014. Inventories and job conditions improved marginally in the same month, while the supplier delivery time index hit a seven-year high. Input prices—a reliable leading indicator for consumer prices—jumped to a 37-month high in March, thereby suggesting that deflationary pressures are finally fading away. New export orders returned to positive territory in March, signaling that the improvement was felt across the board. Overall economic conditions have improved in recent months on the back of aggressive monetary and fiscal stimulus.