With recent Chinese economic data offering mixed signals over the health of the world’s second largest economy, should investors take comfort from the HSBC’s flash manufacturing Purchasing Managers Index (PMI) for March that came in above expectations?
HSBC’s flash China PMI, the first indicator of the strength of the country’s economic recovery without a Lunar New Year holiday distortion, rebounded to 51.7 in March – compared to forecasts for a rise to 50.8 – helped by an increase in new orders including export orders.
Last month, the private sector index dropped to a four month low of 50.4. A reading above 50 indicates expanding activity and one below 50 signals contraction. During the Lunar New Year holidays – which fell in February this year – businesses close down for a two-week period, translating into a period of slower economic activity in the country.
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