Released on April 1, March Caixin China manufacturing purchasing managers Index (PMI) recorded 51.1, 0.2 percentage points higher than February, has been in the expansion range for five consecutive months, a new high since March 2023, showing that manufacturing production and operation activities accelerated to improve.

The previous day, the National Bureau of Statistics released the March manufacturing PMI recorded 50.8, up 1.7 percentage points from the previous value, the first time since October 2023 above the line of expansion and contraction.

MCD5-0195B-T5-G2X-00-CV2 According to the Caixin China manufacturing PMI sub-data, supply and demand expanded simultaneously and accelerated in March. The manufacturing production index and the new orders index continued the upward trend in February, and the former was the highest in the last 10 months. External demand continued to improve, and the new export orders index rose in the expansion range for three consecutive months, and hit a new high since March 2023. Companies surveyed said that market conditions improved and demand was boosted, driving new business growth. Among the three categories of products, the output of investment category increased faster than that of consumer category and intermediate category; However, from the perspective of new orders, the demand for consumer and intermediate products increased and the demand for investment products declined slightly.

As supply and demand pick up, the contraction in manufacturing employment has slowed. The employment index in March was unchanged from January, the highest in seven months, but still slightly below the tipping point. According to the survey sample enterprises, corporate restructuring and cost control have led to voluntary or passive turnover of some employees, and the scale of employment has declined.

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A rise in new orders and a fall in workers led to a rise in manufacturing backlogs in March, pushing the index into expansion territory for the first time in nearly four months. Businesses are using up inventories to fill orders, and the index for inventories of finished goods has been below the line of expansion and contraction for two consecutive months, falling in March to its lowest level since February 2023. At the same time, the good market supply and demand also increased the procurement of manufacturing enterprises, and the purchase volume and raw material inventory increased, and the raw material inventory index hit a new high since December 2020. Inclement weather decreased, and suppliers improved delivery efficiency to meet business demand, and the supplier delivery time index returned to the expansion range.

MCD5-0195B-T5-G2X-00-CV2 The purchasing price index for manufacturing materials fell below the critical point in March for the first time in eight months as some raw material prices fell. As costs fell and competition intensified, companies continued to cut prices to promote sales, and the factory gate price index for manufacturers fell to its lowest level in eight months.

Improved market demand has led to increased confidence in the manufacturing market, and the production and operation expectation index in March has updated the highest value since May 2023. Future output growth will also be supported by business expansion plans and investment in new equipment.

Wang Zhe, senior economist at Caixin Think Tank, said that the economic data in the first two months of 2024 were comprehensively better than expected, and the Caixin China manufacturing PMI remained on the line of growth and contraction for five consecutive months, which confirmed each other, showing that the overall economic recovery is good and the start is stable. However, at the same time, there are still too many unfavorable factors and uncertainties in economic development, and problems such as large downward pressure on the economy, large pressure on the job market, and insufficient effective demand have not been fundamentally improved. In particular, the job market and price level remain low, and internal and external demand need to be further boosted.

Wang Zhe said that at the beginning of the year, the effect of a series of stable growth policies gradually appeared, considering that the current economy is still facing many difficulties, the annual economic growth target in 2024 is also quite aggressive, and the overall policy direction of strengthening, improving quality and increasing efficiency should also be consistent and continuous.