Caixin PMI adds to China rebound

Via Caixin:

China’s manufacturing sector finished the opening quarter of 2019 on a positive note, with operating conditions improving for the first time since last November. Firms signalled 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. The headline seasonally adjusted Purchasing Managers’ Index™ (PMI™) – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – posted 50.8 in March, up from 49.9 in February, to signal the first improvement in the health of China’s manufacturing sector for four months. Although consistent with only a marginal pace of improvement, the index reading was the highest seen since July 2018. 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. Staffing levels at goods producers increased during March, to mark the first expansion since October 2013. Some firms mentioned hiring additional workers to support greater production and new business developments. Staff hiring also coincided with sustained signs of stretched capacity at manufacturers, as outstanding workloads continued to rise at a moderate pace. Although purchasing activity continued to decline at the end of the first quarter, the rate of reduction was only slight. Inventories of finished goods also fell at a softer pace in March, contracting only marginally. Stocks of purchases meanwhile expanded slightly for the first time in four months. Average lead times for inputs continued to lengthen during March, but the degree at which vendor performance deteriorated was marginal overall. After declining in the prior three months, average input prices increased at the end of the first quarter. That said, the rate of inflation was only slight. Companies generally passed on higher input costs to clients by raising their selling prices modestly in March. Some firms also noted that firmer customer demand had enabled them to hike their charges Optimism towards the year-ahead outlook for production improved to a ten-month high in March, with a number of firms linking positive forecasts to expectations of further improvements to overall market conditions. Nonetheless, confidence remained below the long-run series.

So, not tearing it up exactly but growing again at least…

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