China’s factory activity growth falters in March due to weaker demand, slowing production

Caixin/S&P Global manufacturing purchasing managers’ index (PMI) fell to 50 last month, down from 51.6 in February

On Friday, China’s official manufacturing PMI also fell to 51.9 in March from 52.6 in February

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China’s Caixin/S&P Global manufacturing purchasing managers’ index (PMI) fell to 50 last month, down from 51.6 in February, data released on Monday showed. Photo: Xinhua

Published: 9:58am, 3 Apr 2023Updated: 10:59am, 4 Apr 2023

China’s factory activity growth stalled in March, weighed by slowing production and weaker global demand and adding to uncertainty about a post-coronavirus recovery, a private sector survey showed on Monday.

The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) fell to 50 in March. That followed February’s reading of 51.6, which indicated the first monthly expansion in seven months.

The reading far missed expectations of 51.7 in a Reuters poll, and echoed slower growth in an official PMI released on Friday. The 50-point index mark separates growth from contraction on a monthly basis.

The world’s second-largest economy showed gradual recovery in the first two months of the year with a strong pickup in services sector, boosted by the lifting of years of strict virus containment measures.

The foundation for economic recovery is not yet solid. Looking forward, economic growth will still rely on a boost in domestic demand, especially an improvement in household consumption

Wang Zhe

However, a property downturn, weaker global demand and financial uncertainty raised doubts about the strength of momentum.

“The foundation for economic recovery is not yet solid. Looking forward, economic growth will still rely on a boost in domestic demand, especially an improvement in household consumption,” said Wang Zhe, senior economist at Caixin Insight Group.