China March Factory Gauge Rebounds as Export Demand Recovers
Manufacturing PMI posts first increase since November
(Bloomberg) -- A gauge of activity at China’s manufacturers posted its first gain since November, as factories recovered from a seasonal dip at the start of the year and export demand shrugged off threats of a trade war.
The manufacturing purchasing managers index rose to 51.5 in March versus the 50.6 estimate in Bloomberg’s survey and 50.3 last month. The non-manufacturing PMI, covering services and construction, stood at 54.6, the statistics bureau said Saturday, compared with 54.4 in February. Levels above 50 indicate improvement.
Industrial activity is helping the world’s biggest exporter power through the uncertainty from President Donald Trump announcing fresh tariffs on $50 billion of Chinese imports and Beijing’s own retaliation against levies on metals. Overseas shipments surged in February on strong demand amid a synchronized global expansion.
The world is still waiting for the Trump Administration to detail its list of products after the White House ordered sweeping tariffs targeting China last week over Beijing’s alleged intellectual property violations. U.S. Treasury Secretary Steven Mnuchin said on Monday that he is “cautiously hopeful” on an agreement with China, while pressing the Asian nation to open its markets more. China’s Ministry of Commerce said it is open to negotiations, but won’t submit to “unilateral coercion.”
“Exporters would speed up their shipments in order to avoid high tariffs on some products,” said Raymond Yeung, an economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. “The PMI will bode well for the GDP in the first quarter, which will be higher than the official target of 6.5 percent. The growth figure will allow bolder reforms, especially for financial deleveraging.”
Manufacturing output surged in March as factories brought production back online after the Chinese New Year holiday the previous month, according to a statement by the statistics bureau. New export orders rose to 51.3 from 49 last month.
“The rebounding PMI in March showed that the distortion effect of Chinese New Year holiday has been eliminated as demand is recovering significantly, and production activities accelerated across the board,” Chen Zhongtao, an analyst at China Logistics Information Center, wrote in a statement.
- Composite PMI stood at 54, up from 52.9 in February
- PMI of large enterprises reached 52.4, medium enterprises at 50.4, and small ones at 50.1, all improving in March compared with a month earlier
- Factory employment increased to 49.1 from 48.1 in February
--With assistance from Jasmine Ng
To contact Bloomberg News staff for this story: Xiaoqing Pi in Beijing at xpi1@bloomberg.net, Miao Han in Beijing at mhan22@bloomberg.net.
To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, John McCluskey
©2018 Bloomberg L.P.
With assistance from Xiaoqing Pi, Miao Han