Factory operations in China fell in March at the fastest rate in two years. Production and demand fell after the re-emergence of the COVID-19 virus in the country and the war in Ukraine, the Institute for Economic Research announced on Friday (April 1).
The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) reached 48.1 in March, the highest level since February 2020 from the previous 50.4 months.
An index of 50 points separates monthly growth and engagement.
Manufacturing was similar to the PMI released on Thursday, signaling promise for the fastest pace since October 2021. Private research Caixin focuses more on companies that print smaller on the coast than on research data. “The average of the two PMIs is currently below 50, and is currently the lowest since February 2016, excluding the first time in 2020 by the gap,” said Sheana Yue, Tuam China financial economist at Capital Economics.
"According to the company's research, falling levels of Caixin suggest damage is greater in private companies and smaller exports."
Domestic and external demand was also extremely promising.
The new orders sub-index fell at the fastest rate since February 2020, when China competed with the first wave of the COVID-19 phenomenon, leading to a 6.8% drop in GDP in the first three months. 2020 monthlies.
In particular, as the decline in new shipping orders accelerated in March, research firms said consumers suspended or delayed orders due to outbreaks, recent developments in China, export disruption and heightened economic uncertainty due to the Ukrainian crisis.
Strategic price inflation rose for five months and tight international commodity prices exacerbated by the war in Ukraine drove prices up sharply for many manufacturers. The world's second-largest economy, which accelerated in the first two months of the year, is now at risk of a slowdown as authorities restrict production and travel in COVID-19 cities, including major markets such as Shanghai and Shenzhen.
That slowed growth to its lowest level since February 2020, with the March production sub-index hitting 46.4.
Government leaders said at a cabinet meeting on Wednesday they would work with the economy to stabilize the economy as the economy declines.
One bright spot in Caixin's slow search is performance gauges, which rose for the first time in eight months as manufacturers ramped up performance after the Lunar New Year holiday.
"The prospect of war between Russia and Ukraine is uncertain, and the commodity market has changed," Wang Zhe, senior economist at Caixin Insight Group, said in a statement with information on the release. "A number of factors are resonating, adding downward pressure on the Chinese economy and addressing the risk of stagflation."
Wang called for more help for weak groups and small businesses, warning that policymakers must balance natural resource regulation with public health and safety.
(Source: // Router)