(Bloomberg) --
A gauge of growth momentum in China's high-tech industries rebounded significantly in March after falling to a record low in the previous month, indicating that part of the Chinese economy is gradually returning to work.
The Emerging Industries Purchasing Managers' index rose to 55.3 percentage points this month from 29.9 in February, according to Nomura International HK Ltd, citing a research firm connected to the Federation of Logistics & Purchasing that compiled the data.
While the reading is still below the month's average in past five years, it could signal a jump in the official PMI to 57 from 35.7 in February, Chief China Economist Lu Ting in Hong Kong wrote in a report to clients. If that's the case, it'd be the highest reading since 2008 and signal that a rebound from the crushing shutdowns to curb the coronavirus is under way.
China Emerging Industries Gauge Slumps to Record Low on Virus
China is to release its official manufacturing gauge on March 31st.
Still, any improvement in the manufacturing gauge would says more about sentiment recovery from the extremely low base in the previous month, rather than a solid rebound on the year. With the likelihood of a global recession rising, the Chinese economy will continue to face challenges ahead, from falling demand to deflation.
“We expect more policy easing in coming months, while the likelihood of another round of massive stimulus appears low as policy space remains limited,” Lu said.
©2020 Bloomberg L.P.
With assistance from Bloomberg
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