China Economy

China PMI edges up to 50.3

PUBLISHED : Tuesday, 01 April, 2014, 9:36am
UPDATED : Wednesday, 02 April, 2014, 5:05pm

Manufacturing gauges pointed to weakness in China that could prompt Beijing to roll out additional support measures.

A purchasing managers' index fell to 48 last month, the lowest reading since July last year, from 48.5 in February, HSBC and Markit Economics said yesterday.

A separate PMI from the government, with a larger sample size, was at 50.3 from 50.2.

The reports underscore what Premier Li Keqiang last week called "difficulties and risks" as he tries to control surging debt, default dangers and pollution that threatens to stoke public discontent.

Li said the nation had policies to support growth after the State Council said it would accelerate construction spending.

"We expect Beijing to fine-tune policy sooner rather than later to stabilise growth," said Qu Hongbin, the chief China economist at HSBC in Hong Kong.

Qu also said the pace of first-quarter economic growth was likely to have fallen below the government's full-year target of 7.5 per cent.

While yesterday's official PMI was the lowest for March in figures dating to 2005, a sub-index of new export orders rose to 50.1 from 48.2, indicating the first expansion since November.

The report suggested growth was poised to stabilise, said Zhang Liqun, a researcher at the State Council's Development Research Centre.

The government's PMI is based on survey responses from purchasing executives at 3,000 companies, while the HSBC-Markit report comes from more than 420 enterprises.

Meanwhile, manufacturing in the United States expanded at a faster pace last month as gains in production and orders showed the industry was recovering towards the end of a winter-depressed first quarter.

The Institute for Supply Management's index rose to 53.7 from 53.2 in February, it said yesterday. Readings above 50 indicate growth.

In Europe, growth in manufacturing stayed close to the highest level in almost three years last month, adding to signs the region's recovery is gathering pace.

Markit's euro-zone manufacturing PMI index slipped to 53 from 53.2 February. The index has been above 50 since July.