China manufacturing activity speeds up post holidays
Manufacturing activity in China picked up speed in March, an initial HSBC survey has indicated, adding to hopes of a sustained recovery in its economy.
The preliminary reading of HSBC's Purchasing Managers Index (PMI) rose to 51.7, from 50.4 in February. Numbers for March are seen as a true indicator for the sector, as the Chinese New Year holidays skew the data in January and February.
China has been taking measures to boost manufacturing, a big driver of growth. The PMI is a key indicator of the activity in the sector and a reading above 50 shows expansion. Qu Hongbin, chief economist for China at HSBC said the rebound in the sector was fuelled by "stronger new orders and production growth".
"This implies that the Chinese economy is still on track for gradual growth recovery," he added.
China pace of growth has slowed in recent times, not least due to a decline in demand for its exports from key markets. China's economy grew at a pace of 7.8% last year, its weakest performance in 13 years.
However, there have been indications that the world's second-largest economy may be rebounding from the recent slump. Data released earlier this month, showed that China's exports jumped 21.8% from a year earlier, boosted by strong demand from the US and South East Asia.
In the HSBC's latest data, sub-indexes tracking new orders and new export orders both showed the pace of growth accelerating in March, indicating a sustained recovery in the sector.
Meanwhile, industrial output and retail sales also rose in January and February, from, a year earlier, though the pace of growth in those sectors was slower than what many analysts had forecast.