China March Caixin PMI jumps to 1-year high

China's March Caixin manufacturing PMI came at 49.7 vs 48.2 expected and 48.0 last. Today's reading is the highest since March 2015, when the indicator printed 50.7.

Summary

March survey data pointed to only a fractional deterioration in operating conditions faced by Chinese manufacturers. A renewed expansion in total new order books led to the first increase in output for a year."

"However, firms continued to cut their staff numbers, with the rate of job shedding easing only slightly from February’s seven-year record."

"Companies also maintained relatively cautious stock policies, with inventories of inputs and finished goods both falling again in March."

"Meanwhile, companies signalled renewed inflationary pressures as both input costs and prices charged rose for the first time since July 2014, albeit at modest rates."

Comments by Dr. He Fan, Chief Economist at Caixin: "The Caixin China General Manufacturing PMI for March came in at 49.7, up 1.7 points from the reading for February. All categories of the index showed improvement over the previous month. The output and new order categories rose above the neutral 50-point level, indicating that the stimulus policies the government has implemented have begun to take hold."

"However, considering that current conditions remain uncertain, the government needs to continue with moderate stimulus measures to reinforce market confidence."