China Caixin March Manufacturing PMI solid jump higher than February, and better than expected.
51.2, highest since November, six straight months of expansion
- expected 51.1 and prior 50.8
The official data was an OK result also:
- China March official Manufacturing PMI 50.5 (expected of 50.5)
In brief:
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Rising output and demand: Both production and new orders increased, with output growing for the 17th month in a row and export orders hitting a high not seen since April 2023.
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Slight job market improvement: Employment grew marginally, entering expansion for the first time since August 2023. Growth was strongest in firms making investment and intermediate goods.
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Weak pricing environment: Input costs fell for the first time in six months due to lower commodity prices and supplier discounts. Output prices remained under pressure, contracting for the fourth month.
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Supply chain delays: Supplier delivery times lengthened slightly, especially for investment goods. Firms stocked up on raw materials, but reduced finished goods inventories.
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Business sentiment upbeat: Manufacturers remained optimistic about the near-term outlook, despite some concerns over global trade risks. Expectations for future output were above the yearly average.
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Broader context: Economic indicators for early 2024 suggest a stable and slightly improving economy, though labour market weaknesses and deflationary pressures persist due to low domestic demand.
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Policy outlook: The government is prioritising boosting consumption by focusing on employment, income growth, and financial support for households. Stronger and quicker macro policy actions are needed in 2025 to support recovery amid a challenging global environment.
This article was written by Eamonn Sheridan at www.forexlive.com.
