China's Caixin manufacturing PMI unexpectedly jumps to 50.8 in March, Aussie firmer

China's March Caixin manufacturing PMI came in at 50.8 vs. 49.9 expected and 49.9 last, as operating conditions improved for the first time in four months.

On Sunday, the purchasing managers' index (PMI) for China's manufacturing sector arrived at 50.5 in March, up from 49.2 in February, the National Bureau of Statistics (NBS) reported.

Summary

Firms signaled slightly quicker rises in output and overall new work, while employment increased for the first time in over five years. Firmer demand conditions led to a softer fall in purchasing activity, while inventories of inputs rose slightly for the first time since last November. Average input costs rose slightly, though companies generally passed this on to clients in the form of higher selling prices. Sentiment regarding the 12-month business outlook improved to a ten-month high, amid hopes of further improvements in market conditions.

Manufacturing production in China rose for the second month in a row in March. Though modest, the rate of increase was the quickest seen since last August. The upturn was supported by a stronger, albeit still relatively muted, rise in total new work. Furthermore, new export orders rose slightly after a fall in February.

Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: 

“The Caixin China General Manufacturing PMI came in at 50.8 in March, up from 49.9 in the previous month, indicating a notable improvement in the manufacturing industry.”

“The subindex for new orders climbed to its highest level in four months, and the gauge for new export orders returned to expansionary territory, showing that both domestic and external demand rebounded moderately.”