The three major indices return to expansion territory, and the economic prosperity level rebounds

This is from: Yangquan Daily

The Three Major Indexes Re-enter the Expansion Range
Economic Sentiment Improves

—An Insight into March PMI Data

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 re-entered the expansion range, at 50.4%, 50.1%, and 50.5%, respectively, up by 1.4, 0.6, and 1.0 percentage points from the previous month. China’s overall economic sentiment has rebounded.

The manufacturing PMI rises back into the expansion range, with expansion on both the production and demand sides simultaneously—

The data show that in March, as companies stepped up work resumption and production after the Spring Festival, market activity increased. The manufacturing PMI was 50.4%, re-entering the expansion range.

“Simultaneous expansion on both the production and demand sides. The production index and the new orders index were 51.4% and 51.6%, respectively, up by 1.8 and 3.0 percentage points from the previous month. Both rose into the expansion range; manufacturing firms’ production activities accelerated, and market demand improved markedly.” said Huo Lihui, chief statistician at the Service Industry Survey Center of the National Bureau of Statistics.

By industry, production and new orders indices for sectors such as agricultural and sideline food processing, nonferrous metal smelting and processing, and related activities were all above 55.0%, meaning production and demand in those industries were released relatively quickly. Meanwhile, the two indices for industries such as textiles and apparel, chemical fiber, and rubber and plastic products continued to stay below the critical point, with comparatively weak market activity. Driven by the recovery of production and demand, firms’ purchasing intent strengthened, with the purchasing 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 faded, construction sites across the country resumed full operations, economic vitality rebounded, and manufacturing market demand was released relatively well.

Prices indices rebounded sharply. The data show that, influenced by factors such as ongoing increases in the prices of some bulk commodities in recent times and accelerated corporate purchasing activities, the major raw materials purchase price index and the ex-factory price index were 63.9% and 55.4%, respectively, up by 9.1 and 4.8 percentage points from the previous month. The overall level of manufacturing market prices rebounded clearly.

“Taken together, in March the rebound in manufacturing supply and demand and the rise in market prices moved in tandem, showing that the economic rebound has relatively good coordination, and the positive momentum has been consolidated.” Wen Tao said.

Huo Lihui analyzed that in March, the index of production and business activity expectations was 53.4%, up 0.2 percentage points from the previous month, indicating that manufacturing firms’ confidence in near-term market development increased to some extent.

“By industry, the indices of production and business activity expectations for specialized equipment, automobiles, railway ships and aviation equipment, and others were in a higher, prosperous range of above 56.0%. Related companies are more optimistic about future industry development.” Huo Lihui said.

The business activity index rises back into the expansion range, and non-manufacturing conditions improve—

In March, the non-manufacturing business activity index was 50.1%, up 0.6 percentage points from the previous month. Non-manufacturing business conditions improved. The services business activity index was 50.2%, up 0.5 percentage points from the previous month.

Huo Lihui said that, by industry, the business activity indices for sectors such as rail transport, telecommunications radio and television and satellite transmission services, monetary and financial services, insurance, and others were all in a relatively high and prosperous range above 55.0%, with total business volume growing quickly. “In terms of market expectations, the services business activity expectations index was 54.8%, continuing to run at a relatively high level, indicating that services firms remain optimistic about near-term market development.” Huo Lihui said.

At the same time, investment activities related to infrastructure construction started up clearly. As construction projects in various places gradually resumed after the holiday, the business activity index for the construction industry was 49.3%, up 1.1 percentage points from the previous month. From the perspective of market expectations, the construction industry business activity expectations index was 50.5%, above the critical point, indicating that construction firms maintain confidence in future industry development.

Wu Wei, an analyst at the China Federation of Logistics Information Center, said that the level of prosperity for traditional activities related to residential building construction remains relatively low, but the prosperity level for building activities related to infrastructure investment has increased significantly. “The six networks” and infrastructure demand in key areas such as integrated three-dimensional transportation facilities, consumption, low-altitude economy, “artificial intelligence +,” education and healthcare will continue to be released, laying a foundation for fully leveraging infrastructure investment to support 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 prosperity of Chinese enterprises is trending positively.” Huo Lihui said.

(Xinhua News Agency, March 31, Beijing)