The flash manufacturing Purchasing Managers’ Index (PMI), one of the two most closely watched monthly economic reports on the country’s industrial activity, rose to 51.7, up from February’s final reading of 50.4. Numbers above 50 indicate growth.
HSBC’s top China economist Hongbin Qu said the report suggests that Beijing has room “to keep policy relatively accommodative in a bid to sustain growth recovery,” because inflation has remained stable, giving the government some flexibility.
China’s productivity rise in March is ameliorating concerns that the world’s second-biggest economy was slowing in 2013. The HSBC figure is considered a good on-the-ground metric based on surveys submitted by manufacturers.
“Other leading indicators such as daily power output suggest that March manufacturing activities remain relatively weak, and Street economists will likely cut their [first-quarter economic] growth forecasts,” BofA Merrill Lynch economist Ting Lu told MarketWatch.
The preliminary flash manufacturing report is the first indicator of manufacturing output for the month. The final report comes out on the first of the following month. It’s often used to compare data with official government figures.