Surveys of China’s manufacturing and services sectors showed persistent weakness in the world’s second-biggest economy in March, adding to bets that Beijing will have to roll out more policy support to avert a sharper slowdown. The official Purchasing Managers’ Index (PMI), released by the National Bureau of Statistics on Wednesday, edged up to 50.1 in March from February’s 49.9.
Although that was stronger than 49.7 predicted by analysts in a Reuters poll, it was barely above the 50-point level that separates an expansion in activity from a contraction, suggesting factory activity remains tepid at best. In another sign that businesses faced lackluster demand, a separate survey of China’s services sector showed the official non-manufacturing PMI fell to 53.7 from February’s 53.9, hugging a one-year low of 53.7 struck in January.
“Demand in local and foreign markers remained on the soft side, so manufacturing businesses faced a degree of downward pressure,” said Zhao Qinghe, a senior analyst at a research center linked to the statistics bureau. The services sector was the lone bright spot in China’s slowing economy last year, expanding strongly and creating more jobs even as activity in the factory sector fizzled.