Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s purchasing managers’ index (PMI) for manufacturing activity was at 52pc in March, according to the National Bureau of Statistics (NBS), China. In March, the index improved by 16.3 percentage points from a low of 35.7pc in February, and up nearly 3 percentage points from 50.5pc a year ago.


The PMI for non-manufacturing activities in March was 52.3pc, up by 22.7 percentage points from the prior month and down 4.56 percentage points from 54.8 per cent the prior year. 


The composite PMI for March was 53pc, up by 24.1 percentage points from February and down by a percentage point from 54pc a year ago.


A PMI above 50pc indicates growth, but the COVID-19 pandemic in China has significantly impacted the country’s manufacturing and industrial activity. The jump in PMI from the prior month is more an indicator of the stress China’s economy faced in February, rather than an improvement in March. Most industrial activities have resumed, but this does not mean activities have returned to pre-COVID-19 levels. The statistics agency has cautioned that the PMI readings do not indicate a stabilisation in China’s economic activity.


Prompt pre-emptive measures from the Chinese government in form of financial stimulus, easing of export rules, relief from environmental regulations are expected to boost domestic demand in the near term. But with the COVID-19 virus affecting most countries that China has trade relations with, the economy faces a challenge of low demand from these overseas markets.

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