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China’s Economic Recovery Gathered Steam in March, PMI Data Show

China’s economic recovery picked up steam in March as the country’s manufacturing sector fully recovered from suspended production during the Lunar New Year holiday.

China’s official manufacturing purchasing managers index rose to 51.9 from 50.6 in February, according to data released Wednesday by the National Bureau of Statistics.

The reading was higher than the 51.2 median forecast given by economists polled by The Wall Street Journal and remains above the 50 mark that separates activity expansion from contraction, continuing a run started in March last year.

The subindex measuring production edged up to 53.9 from February’s 51.9, while total new orders grew to 53.6 from 51.5 as the workforce returned and factory activities normalized after the holiday.

Exports, a key growth driver for China after the shock of the pandemic, have also returned to expansionary territory, climbing to 51.2 from February’s 48.8.

With the continued recoveries of the world’s major economies, the import index rose to its highest since December 2020, the statistics bureau said.

Analysts expect the gains in March PMIs will help the economy finish the first quarter on a strong note. China’s economy shrank 6.8% in the first quarter last year as the country was hit by the coronavirus.

China’s nonmanufacturing PMI, which includes services and construction activity, was also released Wednesday. That gauge climbed to 56.3 from February’s 51.4, according to the statistics bureau.

The subindex measuring construction activity rose sharply to 62.3 in March from 54.7, while the subindex measuring business activity in the service sector reached 55.2 versus 50.8 in February as the second wave of coronavirus infections that clouded the economic recovery in the first two months of the year was brought under control.

The business activity index in the service industry was significantly higher, indicating that with the epidemic easing, consumer demand has continued to rebound and the recovery of the service industry has accelerated, the bureau said.

Meanwhile, as the weather got warmer in March, activity in the construction industry has picked up, it said.

The new-orders subindex for the entire nonmanufacturing sector–a measure of demand–increased slightly to 55.9 from 48.9.
Source: Dow Jones

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