China’s manufacturing activity growth in March lowest in almost a year due to soft domestic demand

The Caixin/Markit manufacturing purchasing managers’ index (PMI) dropped to 50.6 last month – the lowest level since April 2020 – from February’s 50.9, missing analyst expectations for an uptick to 51.3

The findings contrasted with the official survey which showed manufacturing activity grew at a stronger pace as large firms ramped up production after a brief lull during the Lunar New Year holiday

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The Caixin survey focuses on small, private and export-oriented firms, while the official survey typically polls large and state-owned manufacturers. Photo: VCG

Published: 10:23am, 1 Apr 2021Updated: 10:23am, 1 Apr 2021

China’s factory activity in March expanded at the slowest pace in almost a year on softer overall domestic demand, but underlying economic conditions remained positive even as input and output inflationary pressures intensified for manufacturers.

The Caixin/Markit manufacturing purchasing managers’ index (PMI) dropped to 50.6 last month – the lowest level since April 2020 – from February’s 50.9, missing analyst expectations for an uptick to 51.3.

The 50-mark separates growth from contraction on a monthly basis.

The findings contrast with those in an official survey which showed manufacturing activity grew at a stronger pace as large firms ramped up production after a brief lull during the Lunar New Year holiday.

The growing inflationary pressure limits the room for future policies and is not a good thing for sustaining an economic recovery in the post-epidemic period

Wang Zhe

Although supply chain disruption related to previous coronavirus outbreaks eased, the private survey showed factories reported a sharp increase in input costs, which surged at their fastest clip in 40 months.