China’s industrial activity grows in March – 03/31/2024 – Market

China’s industrial activity rose for the first time in six months in March, according to an official survey released this Sunday, offering relief to authorities even as the crisis in the country’s real estate sector persists, which continues to harm the economy.

The official Purchasing Managers’ Index (PMI) rose to 50.8 in March from 49.1 in February, above the 50 mark that separates growth from contraction. The number surpassed the projection of 49.9 in a Reuters poll.

While the pace of growth was modest, it was also the highest PMI reading since March last year, when momentum from the lifting of Covid-19 restrictions began to stall.

“According to indicators, domestic supply and demand have improved, while homeowner and business confidence is recovering, and the willingness to consume and invest is increasing,” said Zhou Maohua, an analyst at China Everbright Bank.

New export orders rose into positive territory, snapping 11 months of declines, but employment continued to shrink, albeit at a slower pace, PMI data showed.

Recent indicators suggest the world’s second-largest economy is slowly recovering, prompting analysts to start upgrading their growth forecasts for this year.

However, a deep downturn in the Asian giant’s real estate sector remains a major drag on growth, testing the health of heavily indebted local governments and state-owned banks’ balance sheets.

The official non-manufacturing PMI, which includes services and construction, rose to 53 from 51.4 in February, marking the highest reading since September.