Chinese March Factory Activity Bounces Back, Showing Fast Rebound Possible

After reaching a record low of 35.7 in February, the Chinese Purchasing Manager’s Index shot higher in March to 52. Readings above 50 indicate expansion, which shows that the country’s economy rebounded much faster than expected from the coronavirus shutdown.

Volkswagen reported that it is ramping up capacity at 22 of its 24 factories in China, with just two facilities still closed. The carmaker expects to be running at full speed in that nation by mid-summer.

The good news shows that a quick economic rebound is possible, even likely, in other countries around the world, but hurdles remain. Chinese production can only move as fast as demand, and with global trade down significantly, the world’s biggest exporter will soon run out of customers. Until the rest of the world gets through the virus shutdown, there’s only so much that any one nation can do.

Julian Evans-Pritchard, senior China economist at Capital Economics, wrote in a note to clients:

“This does not mean that output is now back to its pre-virus trend. Instead, it simply suggests that economic activity improved modestly relative to February’s dismal showing, but remains well below pre-virus levels.”

Let’s hope it ends quickly.

 

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  1. john todd
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    This is too bad, I will never ever buy anything that says made in China again!
    Screw Apple, Nike, Lenovo, etc!

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