The Chinese government’s official PMI index came in at 51.9 points in March, down from 52.6 in February, confirming the general trend of an economic recovery. Unique Vision / stock.adobe.com
The rise in production and new orders was moderate last month, according to an independent index.
Growth in factory activity in China weakened in March, due in part to weaker international demand which is holding back the post-Covid recovery in the country, according to an independent index published on Monday. The Purchasing Managers’ Activity Index (PMI), calculated by IHS Markit for Caixin, stood at 50 points last month, compared to 51.6 points in February (which was a record high in eight months). A figure above 50 indicates an expansion in activity, and below that indicates a contraction.
The increase in production and new orders was moderate, but the situation in supply chains has improved and business optimism remains high, according to the study. China was hit in December-January by a strong wave of Covid-19 after the sudden cessation of once quasi-mandatory PCR tests, confinements and travel restrictions. Since then, economic activity has gradually resumed.
Stimulate consumption
Nevertheless, “the economy saw a marginal slowdown in the recovery in March as expansion in manufacturing supply and demand weakened significantly from the previous month“, underlines for Caixin the economist Wang Zhe. He points out in particularthe international application” who has “flexed“. On the employment front, after an improvement in February, the workforce fell slightly in March, as employers decided not to replace certain voluntary departures in order to reduce their costs.
“The foundations for economic recovery are not yet solid. Economic growth will depend on stimulating domestic demand, in particular an improvement in household consumptionnotes Wang Zhe. “Only by working to stabilize employment, raise household incomes and improve market expectations can the government achieve its goal of restoring and increasing consumption.»
Announced on Friday, the Chinese government’s official PMI index stood at 51.9 points in March, against 52.6 in February, confirming the general trend of an economic recovery. The Caixin-Markit survey, which polls mainly SMEs, is deemed to paint a more accurate picture of the economy, while the official figure focuses on large public companies.
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