China’s Manufacturing and Export Data Shows Resilience Amid Rising Costs
China's factory activity expanded at its fastest pace in a year, with the Manufacturing Purchasing Managers' Index (PMI) reaching 50.4 in March, surpassing analysts' expectations of 50.1. The rebound follows two consecutive months of contraction, driven by accelerated operations post-Lunar New Year holidays. Production and new orders showed growth, though employment and supply chain metrics remained subdued.
The services sector also edged into expansion territory, with the non-manufacturing PMI climbing to 50.1 from February's 49.5. Meanwhile, exports surged 21.8% year-over-year in the first two months of 2026, defying geopolitical headwinds as Southeast Asian and European demand offset softer U.S. orders.
Rising Middle East tensions are inflating input costs, with raw material prices jumping 63.9% and factory gate prices up 55.4%. Higher shipping expenses and pricier commodity imports like crude oil are squeezing industrial margins, according to government statisticians.
