Factory activity in China rebounded in March from a record low, according to official data released Tuesday, returning to expansion territory while the coronavirus pandemic continues to devastate the global economy.
Businesses have gradually resumed work after being brought to a standstill this year to contain the spread of the deadly pathogen, although further challenges loom on the horizon – such as sluggish external demand as the virus spreads rapidly across the world.
China's Purchasing Managers' Index (PMI), a key gauge of manufacturing activity, surprised at 52.0 in March, according to National Bureau of Statistics (NBS) figures.
This was higher than the 44.8 analysts expected in a Bloomberg survey.
The NBS said the number "reflects that over half of surveyed companies had improvements in their resumption of work and production from the month before, but it does not represent that our country's economic operations have returned to normal levels".
The figure is a marked rebound from 35.7 in February – the worst since China began recording the data in 2005. A reading above 50 suggests growth in the sector.
Non-manufacturing PMI came in at 52.3, also well above analyst predictions.
But economists have cautioned that data may be less rosy for the rest of March.
Nomura analysts Lu Ting, Wang Lisheng and Wang Jing said in a note ahead of the PMI data release that they expect "deeply negative growth for almost all activity data in March", given the relatively slow business resumption rate and slump in external demand.
The pandemic has now left more than a third of the world's population confined to their homes, with economists predicting the most violent recession in recent history to follow.
China, where the first virus cases emerged, is also among the first country to log the crushing impact from strict quarantine measures aimed at curbing the outbreak.