China Manufacturing Activity Slumps to Two-Year Low, Caixin PMI Shows

Activity in China’s manufacturing sector contracted at the steepest pace in 25 months in March, a Caixin-sponsored survey showed Friday, as restrictions aimed at containing a fresh wave of Covid-19 outbreaks hit supply and demand, while the war in Ukraine hurt export orders.

The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the country’s manufacturing sector, fell to 48.1 from 50.4 in February. A reading above 50 signals an expansion in activity, while a reading below that indicates a contraction.

“In March, Covid-19 flared up in several regions across China, disrupting manufacturing supply chains and impacting production,” Wang Zhe, a senior economist at Caixin Insight Group, said in a statement accompanying the PMI report. “Market demand weakened, especially for consumer goods… Overseas demand fell sharply and global transportation conditions deteriorated.”