China manufacturing activity accelerates in March on factories production increase

Manufacturing activity in China accelerated in March, according to official data released Saturday, exceeding forecasts as factories increased production with the end of seasonal anti-pollution measures.

The Purchasing Managers’ Index (PMI), which is published by the National Bureau of Statistics, rose to 51.5 in March compared with 50.3 in February and 51.3 in January.

The index is considered a key indicator of future trends in the world’s second-largest economy. A PMI of over 50 indicates expansion and a figure below 50 points to contraction.

Zhao Qinghe, a senior statistician at the NBS, attributed the PMI rebound to the resumption in manufacturing and orders after a long holiday season in China, the official Xinhua news agency reported.

The acceleration is also linked to “stronger foreign trade, better industrial structure, and increased business purchasing activities”, Zhao said.

Manufacturing activity took a dip earlier this year because of restrictions placed on factories by Chinese authorities to curb air pollution, in addition to separate government efforts to slash excess industrial capacity.

The threat of a trade war between China and the United States, following the imposition of tariffs and sanctions by President Donald Trump, may also have impacted the higher-than-expected rise in activity.

“Exporters would speed up their shipments in order to avoid high tariffs on some products,” Raymond Yeung, an economist at the Australia and New Zealand Banking Group, told Bloomberg News.

A separate manufacturing index, calculated independently by the Caixin media group, will be published on Monday.