Dow Jones Newswires: China’s manufacturing activity contracts in March amid COVID-19 lockdowns

BEIJING — China’s economic activity cooled in March, according to official purchasing managers’ surveys released Thursday, as widespread lockdowns were imposed to prevent the spread of omicron-variant outbreaks.

Both manufacturing and nonmanufacturing gauges released by the National Bureau of Statistics tumbled into contractionary territory in March.

China’s official manufacturing purchasing managers index dropped to 49.5 in March from 50.2 in February, the statistics bureau said Thursday. The result matched the 49.5 median forecast by economists polled by The Wall Street Journal.

The official manufacturing PMI fell below the 50 mark, which separates activity expansion from contraction, after four months of activity expansion.

The subindex of factory production plummeted to 48.8 in March from 50.4 in February, the statistics bureau said. Production was suspended or scaled back due to COVID-19 outbreaks, which later affected operations and production of manufacturers in the same supply chain, said Zhao Qinghe, a senior statistician at the statistics bureau.

Many Chinese manufacturing hubs, including Shenzhen, Shanghai and Changchun, implemented widespread lockdowns this month as daily COVID-19 infections rose to their highest levels since the initial outbreak in the central Chinese city of Wuhan in early 2020.

The widespread lockdowns and quarantine measures also made manufacturers short-staffed while lengthening their delivery time, Zhao said.

Market demand, especially export orders, weakened amid intensifying geopolitical tensions, Zhao said. The subindex measuring total new orders slipped into contractionary territory at 49.5 from 50.7 in February. The subindex for new export orders fell deeper into contractionary territory to 47.2 in March from February’s 49.0.

Also released Thursday was the official nonmanufacturing PMI, which includes both service and construction activity in China. The nonmanufacturing PMI tumbled to 48.4 in March from 51.6 in February as close-contact service activity in the railway and air transportation, catering and accommodation sectors were hit the most, the statistics bureau said.

The subindex measuring service activity fell to 46.7 this month from 50.5 in February.

However, the subindex tracking construction activity rose to 58.1 from 57.6 in February amid Beijing’s call to expand infrastructure investment.

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