After gloomy months, China’s manufacturing sector is again more optimistic about the business situation. In March, the Purchasing Managers’ Index (PMI) rose to 50.8 points, up 1.7 percentage points compared to the previous month, as the statistics office in Beijing announced on Sunday.
This seems to have brightened the mood in the management ranks of the companies surveyed, as the PMI value exceeded the important threshold of 50 points again after six months. From this point onwards, the statisticians assume that business activity will expand.
In the non-manufacturing sector, which also includes the service sector, the index rose by 1.6 points to 53 points in March. The Purchasing Managers’ Index is an important leading indicator for analysts and political decision-makers. The statistics office explained the increase with the resumption of work after the Spring Festival – the multi-day holiday week in February during which many factories across the country are idle.
Growth target of approximately five percent
However, in a year-on-year comparison, the PMI for manufacturing companies was still well below the 51.9 points in March 2023. The ongoing real estate crisis, weak consumption on the domestic market and poor foreign trade balances weighed on the performance of the world’s second largest economy for a long time. However, Beijing has already tried to counteract the problems with moderate measures.
In March, the government set a growth target of about 5 percent at the annual people’s congress, which some observers viewed as ambitious given the state of the economy. In order to stimulate lending, Beijing made fresh money available in the banking system. The government also wants to promote investment in infrastructure projects and provide funds so that consumers and companies can replace old products with new ones.