China PMI inched higher to 51.6 in March

Five good months in a row.

According to HSBC, operating conditions in the Chinese manufacturing sector improved in March, with output and new orders both increasing at solid rates. 

New export orders also rose, albeit marginally. Increased production led to a solid rise in purchasing activity.

Stocks of purchases declined modestly, and for the second month in a row. Input costs fell for the first time in six months, albeit slightly, while output charges were lowered for the first time in four months.

Here's more from HSBC:

After adjusting for seasonal factors, the HSBC Purchasing Managers’ Index™ (PMI™) – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – posted 51.6 in March, up from 50.4 in February, signalling a modest improvement.

Operating conditions in the Chinese manufacturing sector have now improved for five consecutive months.

Production levels increased for the fifth month in a row in March. The rate of expansion accelerated from February to a solid pace, the second-fastest in two years.

Behind the rise in output, total new orders rose solidly, and for the sixth month in a row. A number of respondents attributed growth to strengthened client demand.

Meanwhile, new export orders also increased, albeit marginally.

Volumes of outstanding business declined for the second successive month in March. The rate of backlog depletion was broadly unchanged from February, and remained slight overall. Staffing levels, however, were relatively unchanged from the previous month.

Suppliers’ delivery times lengthened in March, following a slight improvement in February. That said, the rate at which vendor performance deteriorated was slight, with just over 6% of panellists recording longer lead times. A number of respondents linked the deterioration to increased orders placed at vendors.