Published: Sat, April 01, 2017
Technology | By Timothy Carter

China factory index hits 5-year high as economy gains steam

China factory index hits 5-year high as economy gains steam

Meanwhile, growth in China's services sector accelerated at the fastest pace in almost three years, the survey showed.

Chinese factory activity accelerated in March, official data showed Friday, a sign of stability in the world's second largest economy.

The manufacturing PMI went up to 51.8 this month, compared to 51.6 in February, demonstrating the best reading since April 2012.

The PMI by the Chinese Federation of Logistics and Purchasing is based on a 100-point scale, with numbers above 50 indicating expansion.

"The manufacturing sector continued to maintain a steady trend", National Bureau of Statistics (NBS) analyst Zhao Qinghe said in a note, adding that a pickup in production and in demand drove the results.

Production and new orders were key drivers, Zhao said, adding high-tech manufacturing grew rapidly while conditions in traditional industrial production improved.

Meanwhile, the official non-manufacturing PMI rebounded, rising to 55.1 last month from 54.2, indicating strength in China's service sector.

NAES expects the economy to expand 6.7% in the first half of the year, in line with Beijing's official target range of 6.5% to 7%.

Julian Evans-Pritchard, China economist at Capital Economics, said: "In sum, today's PMIs are consistent with broader data that show growth stabilising at a relatively rapid pace in Q1". Earlier this month, a report found imports and exports expanded in the first two months of the year after weakening near the end of 2016.

A steadier currency so far this year may also have aided business confidence, after the yuan fell 6.5 percent against the United States dollar last year.

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