Why did the March PMI rebound significantly?

On March 31, the National Bureau of Statistics released the March PMI index. The manufacturing PMI was 50.4%, compared with the previous figure of 49%. The non-manufacturing PMI was 50.1%, compared with the previous figure of 49.5%. A combination of the waning of the disruptions from the Spring Festival holiday and the acceleration of demand recovery led to a relatively large rebound in the March PMI.

Manufacturing PMI: The manufacturing PMI for March rose noticeably. One of the reasons is the “natural” rebound after the disruptions from the Spring Festival subsided. The PMI is a year-on-month metric, reflecting the marginal change in manufacturing business conditions in the current month compared with the previous month. In the data, the PMIs for January and February fell due to returning to hometowns and the Spring Festival holiday, while the March PMI “naturally” rebounded to above 50% driven by the resumption of work and production. In terms of magnitude, the March PMI increased by 1.4 percentage points from the previous month to 50.4%, basically in line with the typical level seen in the month following the Spring Festival in previous years (year-on-year 1.3%). After removing the supplier order-picking index, which is more affected by weather factors, the actual PMI rose by 1.5 percentage points to 50.3%.

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