China’s factory activity speeds up on export boost, Caixin PMI shows
But China’s macroeconomic policies must be ‘more proactive and decisive’, with immediate implementations, to support a recovery, economist says
China’s factory activity expanded at its fastest pace in four months in March, buoyed by stronger demand and robust export orders, a private-sector survey showed on Tuesday, though an escalating trade war with the United States clouds the outlook.
The Caixin/S&P Global manufacturing PMI climbed to 51.2 in March from 50.8 in the previous month, surpassing analyst expectations of 51.1. The 50-mark separates growth from contraction.
March’s improvement was driven by accelerating new orders, with export orders rising at their fastest pace in 11 months. Regarding the export surge, analysts pointed partly to US importers stockpiling Chinese goods ahead of anticipated tariff hikes.
Hiring showed signs of improvement, with manufacturers adding jobs for the first time since August 2023.
“The job market remained relatively sluggish, and deflationary pressures persisted, due to insufficient effective demand at home and market participants’ weak optimism,” said Wang Zhe, senior economist at Caixin Insight Group.
“We doubt the rest of the year will be much better. The budget does allow for fiscal support to be stepped up further over the coming months. But US tariffs, which look set to escalate this week, will start to weigh on exports before long,” said Julian Evans-Pritchard, head of China economics, on Monday.
Input costs fell for the first time in six months, enabling China’s factories to reduce output prices for the fourth consecutive month.