(Yicai Global) March 31 -- China’s manufacturing and non-manufacturing activity remained in expansion territory, above the benchmark of 50, in March for the third month running, indicating that the country’s economic growth is recovering well, according to the latest statistics.

The purchasing managers’ index for manufacturing, a gauge of factory activity, dipped 0.7 this month from the month before to reach 51.9, the second-highest level in the last two years, according to figures released by the National Bureau of Statistics today. The slight drop was due to the high base last year, it added.

While the non-manufacturing PMI index edged up 1.9 point to 58.2, proof of the strong rebound in the services sector.

As a result, the composite PMI output index, an indicator of the changes in output from both the country’s manufacturing and non-manufacturing sectors, nudged up 0.6 point to 57, demonstrating that the production and operations of Chinese businesses are showing an upward trend.

Both production in the manufacturing industry and market demand have improved noticeably as the economy recovers, said Zhao Qinghe, senior statistician at the NBS' Service Survey Center. Although the sub-index for production slid 2.1 points to 54.6 and that for new orders dipped 0.5 point to 53.6, they are still well within expansion territory.

Boosted by the rebound in production and demand, companies’ expenditure climbed and the sub-index for procurement surged to 53.5, the highest since December 2020. 

Business confidence is upbeat, Zhao said. The sub-index for expectations on production and operations stood at 55.5. 

Recovery in the services sector is accelerating, Zhao said. The business activity sub-index gained 1.3 point in March from February to 56.9 percent, and 10.2 point higher than a year earlier, as policies to spur consumption take effect, he said.

The construction sector is also expanding rapidly. As the weather gets warmer and more engineering projects are commissioned, the sector’s business activity sub-index jumped 5.4 points to 65.6.

However, companies are still facing challenges, such as weak market demand, tight cash flow and high operating costs, Zhao said. So China’s economic recovery still needs to further consolidate its base.

Editor: Kim Taylor