Manufacturing Conditions Improving

Published on Author walkerc

Bouncing back from one of an economic downturn, China is reportedly experiencing an increase in their manufacturing activity.  “The Purchasing Manager’s Index (PMI) was at 50.9 in March, up from 50.1 in February, official data showed. A reading above 50 indicates expansion.”  Even though these reports are looking promising for China, economists point out many problems with these new numbers.  The first problem is that this increase in activity is normal for March since many factories shut down in January and February.  Other problems are that demand from western countries is dropping and that the PMI was expected to be higher than 50.9 for the month of March.  Although the economy is improving and manufacturing output is increasing, there are still many hurdles that the Chinese economy must face before fully returning to an economic powerhouse.  In early March, China saw an increase in the number of exports.  This is also a promising factor as exports are one of the main components of the Chinese economy.  Overall, it looks promising that the Chinese economy will experience a period of growth in the near future.


3 Responses to Manufacturing Conditions Improving

  1. Increasing, but at what rate? This is a diffusion index, so it mainly conveys the direction and the rate of change.

    Be careful though in reading “manufacturing” as equivalent to “exports.” As China’s economy rebalances, more and more demand will be domestic, and that includes for consumer goods (which by definition are “manufactured”).

  2. I’ve been researching Chinese textile manufacturing for my term paper, and in this industry China is losing market share to other Southeast Asia countries (Bangladesh, Cambodia, Sri Lanka). Textile wages in China are rising fast, while these other countries have the wage rates that China did 15-20 years ago.

  3. Is there a reason for the drop in demand from western countries? How will this be combated with domestic demand? Though it looks like manufacturing has expanded in the last month, is does not seem to be doing so at a fast rate. It will be interesting to look out for any government aid regarding manufacturing since it is such a large component of China’s economy.