China PMI shows factories upbeat

China’s official Purchasing Manager Index (PMI) rose in March showing that manufacturing in the country is growing.

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

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

A figure above 50 shows an expansion in the manufacturing 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 the 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 take affect.