China’s Caixin Manufacturing PMI Plunges to 48.1 in March, Lowest Level in 2 Years

Source: S&P Global

China’s manufacturing output plunged at the fastest pace in two years in March on resurgent COVID-19 cases and economic uncertainty from the Ukrainian war. CSI 300 Index up +1.27%, CNY USD down -0.32%

• The Caixin/Markit Manufacturing Purchasing Managers’ Index dropped to 48.1 in March, signaling the steepest pace of contraction since February 2020, from 50.4 in the prior month.
• Demand also deteriorated significantly, both domestically and overseas.
• A sub-index for new orders fell at the sharpest pace since February 2020, when China struggled with the first COVID-19 outbreaks, causing a 6.8% contraction in GDP in Q1 of 2020.
• Input cost inflation rose to a five-month high, with factories attributing increased prices to global supply chain constraints, accelerated by Russia’s invasion of Ukraine.
• On a positive note, the employment index expanded for the first time in eight months as factories increased hiring after Lunar New Year’s Eve.