The Chinese manufacturing sector continued to expand in March, with the latest data showing that the Caixin China Manufacturing Purchasing Managers' Index (PMI) reached 50.9, a slight increase of 0.2 percentage points, marking the highest level since March 2023. This data, released by S&P Global, further confirms the continuous improvement trend in the manufacturing sector, achieving expansion for five consecutive months, and the growth rate has seen the most significant increase in the past 13 months.
Previously, according to data released by the National Bureau of Statistics, the official manufacturing PMI also performed well, reaching 50.8%, up 1.7 percentage points from the previous month, returning to the expansion zone once again.
Several sub-indices of the Caixin China Manufacturing PMI also showed an upward trend. Among them, key indicators such as the production index, new orders index, new export orders index, raw materials inventory index, and production and business outlook index all rose within the expansion zone.
Against the backdrop of improved domestic and foreign demand, the growth rate of new orders (including export orders) accelerated significantly, setting a new record high for the first time in over a year. To cope with the increase in orders, Chinese manufacturers raised their output in March, with the output growth rate reaching a new high since May of the previous year. At the same time, businesses generally increased their purchasing and actively raised their inventory of raw materials and semi-finished products to meet current and future production demands.
Furthermore, for the first time since July of the previous year, manufacturing costs have decreased, albeit slightly, mainly due to a decrease in the price of raw materials. This reduction has led manufacturers to lower the sales prices of their products for the third consecutive month, further promoting the development of sales activities.
Although the scale of labor continued to shrink in March, it reached a new high for the past seven months. Companies indicated that, despite some departures being part of the reason, they are cautious about hiring, mainly due to cost-control considerations.
Surveys show that business confidence in the production outlook for the coming year has improved for the third consecutive month, mainly based on optimism about the economic outlook and the expected increase in production activities, bringing industry confidence to its highest level since April of the previous year.
