China's factory activity likely expanded at a slower pace in March - Reuters poll

FILE PHOTO: An employee works on a production line manufacturing mechanic parts, amid the coronavirus disease (COVID-19) outbreak, at a factory of SMC Corporation, during an organised media tour, in Beijing, China January 10, 2023. REUTERS/Tingshu Wang

BEIJING (Reuters) - China’s factory activity likely grew at a slower pace in March, a Reuters poll showed on Wednesday, suggesting the economic recovery is uneven in the light of weak global demand and a property slump.

The official manufacturing purchasing managers’ index (PMI) is expected to have slowed to 51.5 in March, compared with 52.6 in February - the fastest pace in more than a decade - according to the median forecast of economists in a Reuters poll.

An index reading above 50 indicates expansion in activity on a monthly basis and a reading below indicates contraction.

The world’s second-biggest economy has seen a gradual recovery in the first two months of 2023. Industrial output was 2.4% higher than a year earlier and retail sales jumped 3.5% on year, official data showed.

However, the manufacturing sector’s recovery may take time as factory operations are struggling to fully shake off the long-term effects of Beijing’s protracted zero-COVID policy which it ended in December. Uncertainties from the global banking crisis and fallout on global economies will also affect demand for China’s goods, adding to pressure on manufacturers.

China has set a modest annual growth target of around 5% this year after significantly missing its target for 2022.

Premier Li Qiang said the government will maintain a certain level of economic expansion as it speeds up a transition towards higher quality growth, according to state media on Monday.

The official manufacturing PMI, which largely focuses on big and state-owned firms, and its survey for the services sector, will be released on Friday.

Polling by Madhumita Gokhale and Veronica Khongwir; Reporting by Liangping Gao and Ryan Woo; Editing by Jacqueline Wong