China’s PMI forecast to rise slightly in April

Chinese factory activity in April will see a moderate increase following a remarkable rebound in March, economists said. Factory activity will continue to expand as manufacturing picks up and consumer confidence ticks up.

Experts forecast that the Purchasing Manager’s Index (PMI), which will be released by the National Bureau of Statistics (NBS) on Thursday, will rise slightly from 52 recorded for March, and the continuing recovery in manufacturing activities is largely attributable to the containment of the coronavirus in the country, which is allowing more businesses to reopen and is injecting confidence to manufacturers.

The coronavirus outbreak paralyzed manufacturing in China in February, dragging the PMI figure to a historical low of 35.7 for that month.

A PMI reading of over 50 indicates economic growth or expansion while below 50 indicates contraction.

“The March PMI was elevated by the recovery of production, and as more companies reopened for business in March, so a slight increase in PMI can be expected,” Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology told the Global Times on Wednesday.

Related economic indicators herald positive figures for April. With the exception of Central China’s Hubei Province, the area hit hardest by the epidemic, more than 95 percent of factories above designated level resumed operation by mid-March, and nationwide electricity consumption has resumed to the same level as last year after a U shape plunge.

“Apart from electricity consumption, which surpassed the consumption level of the same period last year in the first half of April, the transportation and logistics sector have also drastically improved in April from March,” Tian Yun, vice director of the Beijing Economic Operation Association, told Global Times.