Supply and demand sides expand in sync, leading to an economic recovery.

This article is reproduced from: Jinan Daily

Data released on March 31 by the National Bureau of Statistics’ Service Industry Survey Center and the China Federation of Logistics and Purchasing show that in March, the Manufacturing Purchasing Managers’ Index (PMI), the Non-Manufacturing Business Activity Index, and the Composite PMI Output Index all returned to the expansionary range, standing at 50.4%, 50.1%, and 50.5% respectively. Compared with the previous month, they increased by 1.4, 0.6, and 1.0 percentage points, respectively, indicating a rebound in China’s economic outlook.

Manufacturing PMI rises back into the expansionary range as both production and demand expand in tandem—

The data show that in March, as enterprises accelerated their work and production after the Spring Festival and boosted market activity, the Manufacturing PMI was 50.4%, returning to the expansionary range.

“Production and demand expand simultaneously. The production index and new orders index were 51.4% and 51.6% respectively, up 1.8 and 3.0 percentage points from the previous month. Both rose to the expansionary range. Manufacturing enterprises’ production activities accelerated, and market demand improved noticeably.” said Huoli Hui, chief statistician of the Service Industry Survey Center of the National Bureau of Statistics.

Looking at industries, the production and new orders indices in sectors such as agricultural and sideline food processing, and nonferrous metal smelting and rolling and processing, were both above 55.0%, with related industries’ production and demand being released relatively quickly. In contrast, in industries such as textile and apparel, chemical fiber, and rubber and plastic products, the two indices remained below the critical point, and market activity was relatively weak. Driven by the recovery in production and demand, enterprises’ procurement intentions strengthened, with the procurement quantity index at 50.9%, up 2.7 percentage points from the previous month.

Wen Tao, an analyst at the China Federation of Logistics Information Center, said that in March, the impact of the Spring Festival had basically dissipated, and construction sites across the country fully resumed work and production, boosting economic vitality and enabling better release of manufacturing market demand.

Price indices rebounded sharply. The data show that influenced by factors such as sustained recent increases in prices of some bulk commodities and the acceleration of enterprises’ purchasing activities, the main raw materials purchase price index and the ex-factory price index were 63.9% and 55.4% respectively, up 9.1 and 4.8 percentage points from the previous month. Overall, the market price level for manufacturing rebounded noticeably.

“Taking them together, in March, the rebound in supply and demand in the manufacturing market and the interconnected rise in market prices reflect that the economic rebound has good synergy, and the favorable momentum has been reinforced.” Wen Tao said.

Huoli Hui analyzed that in March, the production and operating activity expectation index was 53.4%, up 0.2 percentage points from the previous month, indicating that manufacturing enterprises’ confidence in near-term market development had strengthened somewhat.

“Looking at industries, the production and operating activity expectation indices in sectors such as special equipment, automobiles, and railway ships, aviation and aerospace equipment are located in a relatively high business climate range of 56.0% and above. Related enterprises are more optimistic about future industry development.” Huoli Hui said.

Business activity index rises to the expansionary range as non-manufacturing business conditions improve—

In March, the Non-Manufacturing Business Activity Index was 50.1%, up 0.6 percentage points from the previous month, and non-manufacturing business conditions improved. The service sector business activity index was 50.2%, up 0.5 percentage points from the previous month.

Huoli Hui said that from the perspective of industries, the business activity indices for sectors such as railway transportation, telecommunications broadcasting and television and satellite transmission services, monetary and financial services, and insurance are all in relatively high business climate ranges of 55.0% or above, with total business volume growing quickly. “From the viewpoint of market expectations, the service sector business activity expectation index was 54.8%, remaining at a relatively high level, indicating that service sector enterprises remain optimistic about near-term market development.” Huoli Hui said.

At the same time, investment-related activities tied to infrastructure construction were clearly kicked off. As construction projects gradually resumed work across various localities after the holiday period, the construction industry business activity index was 49.3%, up 1.1 percentage points from the previous month. From the viewpoint of market expectations, the construction industry business activity expectation index was 50.5%, above the critical point, indicating that construction enterprises remain confident about future industry development.

Wu Wei, an analyst at the China Federation of Logistics Information Center, said that the business climate level for traditional activities related to housing construction is still relatively low. However, the business climate level for architecture-related activities tied to infrastructure investment has improved noticeably. “The infrastructure construction demand in key areas such as the ‘six networks,’ comprehensive multi-dimensional transportation facilities, consumption, low-altitude economy, ‘artificial intelligence +,’ education and healthcare, and others will continue to be released. This will lay the foundation for fully leveraging the role of infrastructure investment in sustaining steady growth.”

“In March, the Composite PMI Output Index was 50.5%, up 1.0 percentage point from the previous month and above the critical point. This indicates that the overall business and operating climate of enterprises in China is trending favorably.” Huoli Hui said. (Xinhua News Agency, Beijing, March 31) Reporter He Xiao, Wang Yuxiao