China's manufacturing activity expands in March after a 5-month lull

China's manufacturing sector shows signs of recovery in March, with PMI rising to 50.8, indicating expansion.

Manufacturing in China expanded in March after contracting for five consecutive months, according to an official survey of factory managers released on March 31, suggesting a rebound in industrial activities following the Lunar New Year holiday.

The official purchasing managers index, or PMI, rose from 49.1 in February to 50.8 in March. The PMI is on a scale of 100, where 50 marks the cutoff between expansion and contraction.

The monthly manufacturing PMI has mostly been under 50 over the past 12 months: Other than this month, factory activities only recorded an expansion in September.

China’s National Bureau of Statistics senior statistician Zhao Qinghe said the market became more active as companies resumed and sped up production after the Lunar New Year holiday. Many factories stopped running during the holiday, with social media posts suggesting workers at some companies were off for as many as 140 days starting in late 2023 due to the lack of new orders.

Mr. Zhao said the survey also showed some problems for companies remained, including increasing competition in industries and a lack of market demand.

During the annual session of the National People’s Congress in March, China said it would encourage consumers to scrap old appliances and trade in their cars for electric vehicles to help spur domestic demand. And it said 10.4 billion yuan ($1.4 billion) would go to upgrading industries and modernising manufacturing.

Mr. Zhao said the policies promoting the trade-ins of consumer goods and large-scale equipment upgrades still needed further implementation to support the high-quality development of the manufacturing industry.