China’s factory activity expands at fastest clip in 13 months

blog image

China’s factory activity expands : In March, China’s manufacturing activity expanded at its highest rate in 13 months, while company optimism surged to an 11-month high, according to a private survey issued on Monday. Rising numbers of new orders from clients all across the world were the main force behind this expansion.

Forecasters had hoped for a rebound from February’s 50.9 reading on the Caixin/S&P Global manufacturing Purchasing Managers’ Index (PMI), but the actual reading of 51.1 was much higher. Indicating growth rather than contraction, the indicator crossed the 50-point threshold, marking the fifth consecutive month of expansion.

These excellent figures add to the world’s second-largest economy’s optimistic start to the year, which has been marked by recent favorable reports on exports and retail sales. Consistent with this upbeat outlook, Citi increased its 2024 growth prediction for China to 5.0% from 4.6%, referencing the positive statistics and effective policy execution.

During the annual meeting of China’s parliament in March, Premier Li Qiang also announced a bold goal of approximately 5% economic growth for 2024. Nevertheless, experts warn that, given the current difficult economic circumstances—which include the long-term impacts of the property sector slump—the attainment of this goal may necessitate further stimulus measures.

An increase in external demand drove the gauge for new export orders to its highest level since February 2023, according to the survey, which showed a substantial acceleration in manufacturers’ output and new orders in March. Factors such as a decrease in input costs contributed to a surge in business optimism for the upcoming year, which reached its highest point since April 2023.

Although firms have been able to lower production costs and make pricing adjustments due to the decline in raw material prices, they are nevertheless hesitant about employing new staff in the face of fierce market rivalry. Since last August, the employment subindex has maintained a negative value.

While things are looking up, there are still a lot of obstacles to overcome, such as low prices, slow employment, low demand, and persistent economic uncertainty. The only way to overcome these obstacles and keep the economy growing and stable is to increase demand from inside and outside the country.

Ethan Sullivan

Ethan's penchant for the pulse of the fashion world extends to covering lifestyle topics, offering readers a seamless blend of the latest style updates and lifestyle trends.

Read more