BEIJING, April 1 (Xinhua) -- China's Purchasing Managers Index (PMI), a preliminary readout of the country's manufacturing activity, unexpectedly rose for four consecutive months to the highest level since March last year.
PMI jumped to 53.1 percent in March 2012, 2.1 percentage points higher than a month earlier, the China Federation of Logistics and Purchasing (CFLP) said Sunday.
From November to February, the PMI climbed from 49 percent to 51 percent. It was 50.3 and 50.5 percent in December and January respectively.
A reading of 50 percent demarcates expansion from contraction. Market projected March's reading would fall below 51 percent.
The March reading strengthens the expectation that GDP growth for the first quarter will be decent, said Liu Ligang, director of the economic research department of ANZ Greater China.
The CFLP's sub-index for new orders hit 55.1 percent, up 4.1 percentage points from February. The data for new export orders climbed 0.8 percentage points to reach 51.9 percent.
"Exports are better than expected, suggesting the U.S. and EU economies are on the way of recovery," said Cai Jin, vice chairman of the CFLP.
The sub-index for raw material purchasing prices climbed for four consecutive months to 55.9 percent, 1.9 percentage points higher than a month ago, also the highest since October.
Compared with the two-year peak of 73.5 percent, the current purchasing prices are not very high. But consecutive rises signaled inflation pressure was building, Cai said, noting March's reading did not reflect the latest fuel price hike.
In terms of the scale of the surveyed business, the sub-index for large enterprises rose 3.4 percentage points to 54.3 percent. The CFLP report attributed it as the major boost of March's reading.
The sub-index for the medium-sized enterprises gained 0.9 percentage points to 50.4 percent, while that for small business declined 4.3 percentage points to 50.9 percent.
Cai said the contrast shows small enterprises are more sensitive to macro-economic conditions.
ANZ's research director expects that the central bank will not loosen the monetary policy in the near future.
"Meanwhile, a batch of central bank bills will arrive at maturity in the coming weeks providing adequate liquidity, we do not expect any interest rate cuts in the short-term, and the reserve requirement ratio (RRR) increase is expected to be postponed to May or June," Liu said.
However, the CFLP data again contradicted figures released hours later by British bank HSBC, which placed the PMI for March at 48.2, declining for five consecutive months.
HSBC economist Qu Hongbin said the tepid new export orders have prolonged economy's slowing trend.
He expected the central bank to further ease policies to prop up growth which included at least 100 basis points rise in RRR and more tax cuts and fiscal spending in the first half of this year.
China plans to expand the sample size for measuring the PMI from the current 820 companies to around 3,000, according to a previous statement from the National Bureau of Statistics and the CFLP. A timetable for the changes has not been specified.
Editor: Chen Zhi
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