The Purchasing Managers’ Index (PMI), a key gauge of manufacturing activity, grew greater than anticipated to 51.9 — from 50.6 in February — in accordance with the National Bureau of Statistics, with manufacturing accelerating after the vacation lull and main economies overseas additionally recovering from coronavirus slowdowns.
Non-manufacturing PMI made a big rebound to 56.3, increased than the Bloomberg forecast of 52.0 and pointing to higher efficiency in industries like building and better expectations for hard-hit service sectors.
“The main driver was stronger services activity as the disruption from January’s Covid-19 flare-up and resulting travel restrictions eased,” mentioned Julian Evans-Pritchard, senior China economist at Capital Economics.
“But there was also a sharp turnaround in the construction index,” he added.
In manufacturing, NBS senior statistician Zhao Qinghe mentioned that firms — together with smaller ones — have performed higher, though there have been some delays in imported uncooked supplies through the pandemic, resulting in increased costs and longer supply occasions.
But analysts consider the bounce is just not sustainable.
Nomura chief China economist Lu Ting instructed AFP an element behind the “big rebound” was the repression of activity earlier than and through the Lunar New Year vacation on account of an increase in Covid-19 circumstances, resulting in pent-up demand in March.
Pang added that Covid-19 resurgences within the US and Europe may derail new export orders, a key issue for the pick-up this month.
“From an export perspective, this is quite a fragile recovery,” she mentioned.
The “room for catch-up growth will diminish” as service sector activity returns to development as properly, Evans-Pritchard mentioned.
“And the current strength of exports is likely to unwind over the coming quarters as vaccinations allow a return to more normal global consumption patterns,” he mentioned.