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Manufacturing conditions in China improved in March for the fifth consecutive month. The HSBC Purchasing Managers’ Index™ (PMI™) was 51.6 for the month, up from 50.4 in February.

The rate of expansion accelerated to the second-fastest pace in two years. New orders rose for the sixth month in a row after stronger demand from customers. Export orders increased marginally.

Qu Hongbin, Chief Economist for Greater China and Co-Head of Asian Economic Research at HSBC, said: “China’s recovery continues, mainly driven by the gradually improving domestic demand conditions. The decline in input prices suggests a modest pace of demand recovery and moderating inflationary pressures. This, plus the lingering external headwinds, implies the Beijing policy makers should keep a relatively accommodative policy stance in place.”

China’s recovery continues, mainly driven by the gradually improving domestic demand conditions

Qu Hongbin,
Chief Economist,
Greater China, HSBC

The PMI™ figure of 51.6 was marginally lower than the HSBC Flash China Manufacturing PMI™ of 51.7 reported on 21 March.

Staffing levels were broadly unchanged in March. The backlog of business fell slightly for the second successive month, and stocks of finished goods increased.

After five months of inflation, manufacturers’ input costs fell marginally, with some firms saying raw material costs were lower. Selling prices also fell modestly for the first time since November.

PMIs™ are a monthly indicator of economic trends. The China survey is based on responses from purchasing executives in more than 420 manufacturing companies. Any figure above 50.0 signals expansion, while below 50.0 indicates contraction.

The intellectual property rights to the HSBC China Manufacturing PMI™ provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, HSBC use the above marks under licence. Markit and the Markit logo are registered trade marks of Markit Group Limited.

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