- CFLP reveals China's manufacturing PMI at 52.0 in March versus 35.7 in February.
- China's non-manufacturing PMI improves from February's 29.6 to 52.3 in March.
- Economists expect a 1% to 2% decline in China's GDP in 2020.
The China Federation of Logistics and Purchasing (CFLP) released its monthly report on manufacturing and non-manufacturing purchasing managers’ index (PMI) on Tuesday. The data suggested both sectors to have improved in March following a sharp decline in February that was attributed to the widespread Coronavirus that has so far infected more than 788,200 people worldwide and caused over 37,800 deaths.
The CFLP revealed China’s manufacturing PMI at 52.0 in March. The figure was recorded at a much lower 35.7 in February. Economists had expected improvement in the index in March but have forecast it to remain in the contraction zone at 44.9. A reading above 50 is traditionally construed as expansion.
Non-Manufacturing PMI Climbed To 52.3 In March
The non-manufacturing PMI, on the other hand, was recorded at an even better 52.3 in March. In February, the index had sunk sharply to 29.6 in China. Economists had expected the improvement in March to be capped at 42.1 in the non-manufacturing PMI.
According to the National Bureau of Statistics, China worked committedly towards preventing and controlling the flu-like virus in March. Its effective measures resulted in minimizing the fast-spread of the virus with businesses gradually resuming operations and contributing to a massive improvement in the indices this month.
Monday’s data also highlighted that the employment, new orders, and production sub-indices all improved in march.
The Statistics Department, however, reiterated that the upbeat data in March doesn’t suggest that the economic activity in China has returned to pre-virus levels. While improvement has been observed, there is still a lot of ground to cover before the country returns to its normal economic activity.
Economists Forecast A 1% To 2% Decline In China’s GDP
Economists are currently forecasting a 1% to 2% decline in China’s GDP in 2020 with the majority of the drop confined to the first half. The second half is expected to put the economy on track to recover back to the pre-virus level provided that the pandemic is controlled in this time period.
In its statement on Monday, China’s Ministry of Industry and Information Technology revealed a 98.6% rate of resumption to work for the larger industrial enterprises as of March 28th. The rate of workers’ return to work was posted at 89.9%.
In the forex market, USD/CNY dropped from 7.0961 level on Monday to 7.0870 following the economic data. The pair, however, recovered later in the day and is currently exchanging hands at 7.0981.