Asia Business

China PMI shows manufacturing is upbeat as costs fall

An employee works at the workshop of a textile factory in China
Image caption China's economic growth has been powered by the success of its manufacturing sector

China's official Purchasing Manager Index (PMI) rose in March indicating that growth in the country's manufacturing sector is picking up.

The PMI reading rose to 53.8 according to the China Federation of Logistics and Purchasing.

There had been concerns about a possible slowdown in manufacturing after the index dropped to a six-month low of 52.2 in February.

A figure above 50 shows an expansion in the sector.

China is one of the biggest manufacturing hubs in the world and its factory output is seen as a key indicator of global demand.

Analysts say the latest numbers show that China's growth remains on track.

"The PMI rebounded last month after edging down for three consecutive months, showing a trend that is in line with the stabilisation of the economic growth," said Zhang Liqun, a government economist.

Falling prices

One of the key indicators that economists have been keenly watching is the cost of raw materials to manufacturers.

Commodity prices have been rising recently, pushing up costs for factories.

The latest survey showed that the input prices sub-index, a measure of how much factories pay for raw materials and other intermediary goods, fell.

The index eased to 68.3 in March, down from February's level of 70.1.

Analysts say that this shows that China's recent attempts to rein in price rises is starting to have an impact.

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