Results of a private survey released on Wednesday showed China’s manufacturing activity expanded slightly in March. It happened because the factories began to come online amid a coronavirus outbreak.
The Caixin/Markit manufacturing Purchasing Manager’s Index for March was 50.1. Analysts polled by Reuters had expected the Caixin/Markit PMI to come in at 45.5, compared with February’s sharpest contraction on record at 40.3.
PMI readings above 50 indicate expansion, while those below that level signal contraction. Although the survey showed business confidence improved as output resumed gradually, Caixin and IHS Markit noted demand challenges ahead to the manufacturing activity.
According to cnbc.com, analysts confirmed in a press release. They said, “Demand conditions remained fragile, as highlighted by a second monthly fall in total new business.”
“A number of panel members mentioned that firms had delayed or cancelled orders due to the ongoing COVID19 pandemic,” they added.
Quoted from cnbc.com, they emphasized its point due to the coronavirus. They said, “New export work declined solidly during March. It caused of nations around the world grapple with containing the spread of the virus.”
Martin Rasmussen, China economist at Capital Economics, gave his response. The jump in the headline figure only suggests that conditions improved in March over February. But, it does not mean that the output has rebounded to levels seen before the outbreak.
“Weak foreign demand and labour market strains will hold back the pace of recovery,” he added.
Analysts said the official reading on Tuesday showed an expansion after Chinese economic activity came to a halt in February. The PMI readings are sequential.
The Caixin/Markit survey features a bigger mix of small- and medium-sized firms. In comparison, the official PMI survey typically polls a large proportion of big businesses and state-owned companies.
