MercoPress. South Atlantic News Agency

Surprising factory activity numbers in China, according to Beijing stats office

The Purchasing Managers' Index (PMI) rose to 52 in March from the collapse to 35.7 in February, China's National Bureau of Statistics (NBS) said on Tuesday

Factory activity in China unexpectedly expanded in March after contracting sharply to a record low, but the rapid global spread of the coronavirus is expected to keep businesses and the overall economy under heavy pressure as foreign demand slumps.

The Purchasing Managers' Index (PMI) rose to 52 in March from the collapse to a record low of 35.7 in February, China's National Bureau of Statistics (NBS) said on Tuesday, and above the neutral 50-point mark that separates growth from contraction on a monthly basis.

Analysts are forecasting China to suffer a steep economic contraction in the first quarter due to widespread disruptions to business and consumer activity caused by the virus as authorities put in place tough public measures to contain the pandemic.

The NBS said the number “reflects that over half of surveyed companies had improvements in their resumption of work and production from the month before, but it does not represent that our country's economic operations have returned to normal levels”.

The figure is a marked rebound from 35.7 in February - the worst since China began recording the data in 2005. A reading above 50 suggests growth in the sector.

Non-manufacturing PMI came in at 52.3, also well above analyst predictions. But economists have cautioned that data may be less rosy for the rest of March.

Nomura analysts Lu Ting, Wang Lisheng and Wang Jing said in a note ahead of the PMI data release that they expect “deeply negative growth for almost all activity data in March”, given the relatively slow business resumption rate and slump in external demand.

The pandemic has now left more than a third of the world's population confined to their homes, with economists predicting the most violent recession in recent history to follow.

China, where the first virus cases emerged, is also among the first country to log the crushing impact from strict quarantine measures aimed at curbing the outbreak.