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Chinese factory activity slowed sharply in March, according to the Purchasing Managers’ Index (PMI) released by China’s National Bureau of Statistics. A contraction in industrial activity linked in particular to the resurgence of Covid-19 and the war in Ukraine.
With our correspondent in Beijing, Stephane Lagarde
The last time that manufacturing and service activities declined simultaneously in China was in February 2020 with the arrival of the Covid-19 pandemic in the world. Two years later, the same images of megalopolises with deserted streets return to the television news and China is reconfiguring populations facing Omicron rebound.
The official composite PMI, which combines manufacturing and services, stood at 48.8 in March, down from 51.2 in February. The two PMI indices fell below the 50 mark in March, which means that activity has contracted.
There are several reasons for this. Temporary shutdown of assembly lines in factories close to epidemic centers. The Shanghai lockdown has also turned car production upside down. Tesla, for example, was forced to suspend production in order to comply with health measures.
New export orders also fell. The war in Ukraine, geopolitical uncertainty and disruptions in the shipping and rail freight sector held back buyers. And there is also a drop in domestic demand and a slowdown which is linked to the rise in the cost of inputs, starting with raw materials, which have reached their highest level in five months.
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