Coronavirus: China’s small factories stabilised in March after lockdown, private PMI shows

Caixin/Markit PMI for March came in at 50.1, following an all-time low of 40.3 in February. A reading above 50 signifies growth

Survey follows official PMI which also showed positive outlook for larger Chinese manufacturers

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Smaller firms in China have struggled to resume operations after the coronavirus severely disrupted the economy in the first two months of the years. Photo: Xinhua

Published: 9:53am, 1 Apr 2020Updated: 10:53pm, 1 Apr 2020

Activity at China’s smaller, privately-owned factories strengthened in March, after a weeks-long lockdown due to the coronavirus pandemic, data released on Wednesday showed.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) gave a reading of 50.1, up from 40.3 in February and well above analysts’ forecasts of 45. A figure above 50 signifies growth, while less than that represents a contraction. February’s figure was an all-time low.

The survey followed the official manufacturing PMI on Tuesday, which also overshot analysts’ expectations and returned to growth, at 52.0. That survey focuses more on larger, state-owned producers.

PMIs are gauges of sentiment rather than actual output, thus are highly sensitive to short-term fluctuations in business conditions due to the way they are collated. Researchers simply ask respondents if things are better or worse than they were the previous month.

A recovery from a torrid first two months of the year was to be expected, given most of China’s factories were closed for most – if not all – of February. However, it was also expected that smaller firms would be gloomier about the outlook.

While the vast majority of large companies in China have reopened, smaller firms have struggled to follow suit. Government data showed that 96.6 per cent of large firms had reopened as of last week, compared to 71.7 per cent of smaller companies.

Coronavirus: China’s small factories stabilised in March after lockdown, private PMI shows

Caixin/Markit PMI for March came in at 50.1, following an all-time low of 40.3 in February. A reading above 50 signifies growth Survey follows official PMI which also showed positive outlook for larger Chinese manufacturers

Caixin/Markit PMI for March came in at 50.1, following an all-time low of 40.3 in February. A reading above 50 signifies growth

Survey follows official PMI which also showed positive outlook for larger Chinese manufacturers