China's manufacturing output expanded in March for the first time in six months, a sign of potential recovery for the world’s second biggest economy.
The Purchasing Managers' Index (PMI) rose to 50.8 in March from 49.1 in February, above the 50-mark separating growth from contraction and topping a median forecast of 49.9.
March saw the highest PMI reading in 12 months, which is when China’s economy began to slow as it emerged from the Covid-19 pandemic.
The latest PMI data also showed that new export orders rose into positive territory during March, snapping an 11-month decline.
However, employment in most areas of China’s economy continued to shrink in March.
The rise in manufacturing output is the latest sign that China’s economy is slowly recovering, leading some economists to start upgrading their growth forecasts for the year ahead.
China’s economy has struggled since the government in Beijing removed Covid-19 curbs in late 2022.
A debt crisis in the property market, mounting government debts, and weakening global demand have weighed on economic growth across China.
Despite the troubles, Chinese Premier Li Qiang announced a 2024 economic growth target of 5% in March at the annual meeting of the National People's Congress, China's Parliament.
However, economists say China’s government will need to introduce more economic stimulus measures if it is going to reach that 5% growth target.
