China's Purchasing Managers' Index (PMI) for March returns to the expansionary territory

March China’s Purchasing Managers’ Index Returns to the Expansion Zone

— Interpretation of China’s Purchasing Managers’ Index for March 2026 by Huoli Hui, Chief Statistician at the Service Industry Survey Center of the National Bureau of Statistics

On March 31, 2026, the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing released China’s Purchasing Managers’ Index. In response, Huoli Hui, chief statistician at the Service Industry Survey Center of the National Bureau of Statistics, provided an interpretation.

In March, the manufacturing purchasing managers’ index, the non-manufacturing business activity index, and the composite PMI output index all returned to the expansion zone, at 50.4%, 50.1%, and 50.5% respectively. Compared with the previous month, they rose by 1.4 percentage points, 0.6 percentage points, and 1.0 percentage point respectively, indicating a rebound in the overall business climate of China’s economy.

I. Manufacturing PMI Rises to the Expansion Zone

In March, as enterprises accelerated their restart and production after the Spring Festival and market activity improved, the manufacturing PMI was 50.4%, returning to the expansion zone.

(I) 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 1.8 and 3.0 percentage points from the previous month. Both rose to the expansion zone. Manufacturing companies’ production activities accelerated and market demand improved markedly. By industry, the production and new orders indices in sectors such as agricultural, sideline and food processing, nonferrous metal smelting and processing, and other similar industries were all above 55.0%, and in related industries, the release of production and demand is occurring relatively quickly. Meanwhile, the two indices in sectors such as textiles, apparel and accessories, chemical fibers, and rubber and plastic products continued to be below the threshold, and market activity remained relatively weak. Driven by the recovery in production and demand, enterprises’ procurement intentions increased, with the procurement quantity index at 50.9%, up 2.7 percentage points from the previous month.

(II) PMI Recovers across Large, Medium, and Small-Sized Enterprises. The PMI for large enterprises was 51.6%, up 0.1 percentage point from the previous month, indicating that the business climate improved steadily. The PMIs for medium and small-sized enterprises were 49.0% and 49.3% respectively, up 1.5 and 4.5 percentage points from the previous month, showing a clear improvement in the business climate.

(III) The Three Key Sectors Expand More Quickly. High-tech manufacturing PMI was 52.1%, up 0.6 percentage point from the previous month, staying above the threshold for 14 consecutive months, with a continuously favorable development trend. Equipment manufacturing and consumer goods industries’ PMIs were 51.5% and 50.8% respectively, up 1.7 and 2.0 percentage points from the previous month, and both moved into the expansion zone. High energy-consuming industries’ PMI was 48.9%, up 1.1 percentage point from the previous month, with the business climate recovering somewhat.

(IV) Price Indices Rebound Significantly. Influenced by factors such as continued price increases in some major bulk commodities and an acceleration in enterprises’ procurement activities, the main raw materials purchasing price index and ex-factory price index were 63.9% and 55.4% respectively, up 9.1 and 4.8 percentage points from the previous month. Overall manufacturing market prices rebounded markedly. By industry, the two price indices in sectors such as oil, coal and other fuel processing, and chemical raw materials and chemical products were both above 70.0%, and the overall procurement and sales price levels in related industries rose notably.

(V) Market Expectations Rise Gradually and Firmly. The production and operating activity expectation index was 53.4%, up 0.2 percentage point from the previous month, showing that manufacturing enterprises’ confidence in near-term market development increased somewhat. By industry, production and operating activity expectation indices in sectors such as special equipment, automobiles, railway, ships, and aerospace equipment were in higher business-climate ranges above 56.0%, and related enterprises are more optimistic about future industry development.

The survey results also show that, affected by factors including geopolitical conflicts in the Middle East region, prices of related raw materials such as oil and chemicals rose sharply. Combined with rising logistics freight rates, the share of enterprises this month reporting high raw-material costs and high logistics costs both increased compared with the previous month.

II. Non-Manufacturing Business Activity Index Rebounds

In March, the non-manufacturing business activity index was 50.1%, up 0.6 percentage point from the previous month, indicating an improvement in the non-manufacturing business climate.

(I) Service Sector Business Activity Index Rises Above the Threshold. The service sector business activity index was 50.2%, up 0.5 percentage point from the previous month. By industry, business activity indices in sectors such as railway transportation, telecommunications radio and television and satellite transmission services, money and finance services, insurance, and others were all in relatively high business-climate ranges above 55.0%, and overall business volume grew at a relatively fast pace. After the Spring Festival, business activity indices in sectors such as retail, accommodation, and catering related to residents’ travel and consumption were below the threshold, and market activity weakened somewhat. Judging from market expectations, the service sector business activity expectation index was 54.8%, continuing to remain at a relatively high operating level, indicating that service sector enterprises remain optimistic about market development in the near term.

(II) Construction Industry Business Activity Index Improves. As construction projects in various places gradually restored work and resumed construction after the holiday period, the construction industry business activity index was 49.3%, up 1.1 percentage points from the previous month. From the perspective of market expectations, the construction industry business activity expectation index was 50.5%, above the threshold, indicating that construction enterprises remain confident about future industry development.

III. Composite PMI Output Index Rises Above the Threshold

In March, the composite PMI output index was 50.5%, up 1.0 percentage point from the previous month, indicating that, overall, the business climate of enterprises’ production and operations in China is improving. The manufacturing production index and the non-manufacturing business activity index that make up the composite PMI output index were 51.4% and 50.1% respectively.

(Editor: Wenjing)

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                                                            PMI