Beijing: China’s official factory gauge climbed to the highest in almost five years, the latest evidence of gathering momentum in the world’s second-largest economy.
The manufacturing purchasing managers index increased to 51.8 in March, compared with economist estimates that it would match the November reading of 51.7. The non-manufacturing PMI rose to a two-year high of 55.1 from 54.2 last month. Numbers higher than 50 indicate improving conditions.
The new strength follows a factory rebound since mid-2016, while industrial output and private investment also have picked up. Still, the brighter picture has been boosted by surging producer prices that may be close to peaking, and the government is working to stem swelling financial risks by reining in excessive borrowing.
“The fact that the real strength is with the non-manufacturing PMI suggests that there’s fundamentally a good story going on here,” said James Laurenceson, deputy director of the Australia-China Relations Institute at the University of Technology in Sydney. “Manufacturing is where you’d expect to see the effects of stimulus showing up.”
New orders increased to a nearly three-year high of 53.3 from 53, the National Bureau of Statistics said, while new export orders rose to 51, the highest in almost five years. The reading for large enterprises was strongest at 53.3 while medium-sized companies stood at 50.4 and small firms at 48.6. Bloomberg