China manufacturing stabilises in March
By Sean Farrell
Date: Wednesday 01 Apr 2020
(Sharecast News) - Chinese manufacturing stabilised in March after a record plunge caused by the coronavirus crisis, a survey showed.
The Caixin IHS Markit purchasing managers' index rose to 50.1 in March from a record low of 40.3 in February. The reading beat economists' average expectations for a score of 45.0.
The March score, which indicates unchanged activity, was an improvement on February when business plunged in response to an extreme shutdown to stem Covid-19 infections. The survey follows a surprise rebound in the government's official measure of manufacturing activity published on Tuesday.
Beneath the headline figure conditions remained difficult for China's factory managers. Demand was fragile as new business fell for the second straight month and new exports dropped as other nations imposed restrictions to cope with the virus.
Freya Beamish, chief Asia economist at Pantheon Macroeconomics, said: "Besides being above consensus, the result is grim suggesting that March activity was little changed from February, when the brunt of the virus impact hit."
Chinese manufacturers cut jobs though the rate of reductions eased from February and supply chains remained under pressure.
China has been reopening factories after suppressing the spread of the coronavirus with shutdowns and strict isolation measures for households. But it now faces plunging demand for its manufactured goods from other nations shutting down their economies to contain the virus.
Zhengsheng Zhong, chairman and chief economist at CEBM Group, said: "The manufacturing sector was under double pressure in March: business resumption was insufficient and worsening external demand and soft domestic consumer demand restricted production from expanding further ... The worsening situation overseas is another blow to manufacturing demand."
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