China official factory PMI rises to 51.5 in March, beats forecasts

[BEIJING] Growth in China's manufacturing sector picked up more than expected in March as authorities lifted winter pollution restrictions and steel mills cranked up production as construction activity swings back into high gear.

The official Purchasing Managers' Index (PMI) released on Saturday rose to 51.5 in March, from 50.3 in February, and remained well above the 50-point mark that separates growth from contraction on a monthly basis.

Business conditions in China's vast manufacturing sector have now improved for 20 straight months.

Analysts surveyed by Reuters had forecast the reading would pick up slightly to 50.5 as heavy industry and the construction sector emerged from a winter lull.

Boosted by government infrastructure spending, a resilient property market and unexpected strength in exports, China's manufacturing and industrial firms helped the economy produce better-than-expected growth of 6.9 per cent in 2017.

But economists widely expect that pace to cool this year, citing the drag from weaker property investment and rising borrowing costs, even without any global trade shocks.

REUTERS