China’s manufacturing output showed signs of improvement in March, but some economists predict it may weaken again this month.
China’s official purchasing managers index rose to 50.9 last month, up from 50.1 in February, with almost all sub-indices showing growth.
New orders rebounded to 52.3 in March from 50.1 in February, while new export orders picked up to 50.9 from 47.3 over the same period.
HSBC’s alternate PMI also rose in March, to 51.6 from 50.4 in February.
March was the official PMI’s sixth consecutive month above 50, which indicates expansion, but the reading was lower than predicted by most analysts.
Nomura economist Wendy Chen said the official PMI illustrated that both domestic and external demand improved in March.
But she argued that as finished goods inventory jumped to 50.2 in March from 46.6 a month earlier, the gap between new orders and finished goods inventory had fallen to 2.1 percentage points in March from 3.5 percentage points in February, implying that the official PMI may weaken in April.
“We maintain our view that the economic recovery is unsustainable and that growth will slow to 7.3 percent year-over-year in H2,” she said.