There was heartening news for the Chinese economy yesterday as official data showed that manufacturing has increased at its fastest rate for nearly a year.
One of the key manufacturing benchmarks, the Purchasing Managers Index (PMI), showed an encouraging 0.8 increase to 51 last month compared to the month previous. Anything above 50 shows growth.
The communist country has experienced its worst period of growth for over a decade and is slowly coming into a recovery phase, assisted by a boost in domestic spending.
The news comes at a key moment in the year as numbers can often look skewed due to the vastly slower output that occurs around the Lunar New Year Holiday. Factory and general business closures make it very difficult to gauge the economic health of those countries that celebrate it.
Normally, economists will see a spike around March when business gets back to normal levels and there will be a gradual increase in activity as the holidays fizzle out and businesses attempt to catch up with orders.
A pick up in the general health of the global economy also helped as higher order volumes from key markets boost manufacturing levels.
“There may be some stabilisation returning to the economy as the improvement in the PMI shows,” said a government representative working at a state-run think tank. “The authorities are delighted that the previous trend has been reversed and it now looks like the country can enter a period of recovery that we hope can continue for the rest of the year.”
In a separate survey by investment firm CMC Gao Hua, the PMI was again shown to increase between the first quarter and April, this time up to an impressive 51.7 on the scale.