China: Manufacturing and non-manufacturing PMIs increase in March
Latest reading: China’s official NBS Manufacturing PMI rose to 50.4 in March 2026, up from 49.0 in February and above expectations of 50.1. This was the strongest reading since March last year and signaled a return to expansion following two months of contraction, supported by increased government spending early in the year and resilient exports linked to AI-driven global demand. Output growth picked up, and new orders rebounded strongly. External demand also improved, with export orders rising, while purchasing activity increased. However, employment remained in contraction.
The NBS Non-Manufacturing PMI increased to 50.1 in March 2026 from 49.5 in the prior month, coming in above expectations of 49.9. The reading points to a stabilization in the services sector following two consecutive months of contraction. At the component level, the services activity index strengthened and the construction index also edged higher, though it continued to signal ongoing stress in the property sector. Total new orders remained in decline, albeit at a slightly moderated pace due to firmer export orders, while employment deteriorated further.
Panelist insight: Commenting on the data, Nomura analysts said:
“The March improvement in official PMIs reflects seasonal distortions, as businesses resumed operations following the longer- and later-than-usual Lunar New Year holiday in February. Despite the March PMI rebound, we expect major activity indicators to deteriorate in coming months, and markets should not interpret this as a sign of a real economic recovery. The notable surge in the price indices, which could be less affected by LNY distortions, points to notable inflationary pressure in March amid Middle East tensions.”