Yesterday, the National Bureau of Statistics released the March 2026 PMI data. The manufacturing PMI returned to the expansion zone, indicating a clear month-on-month improvement trend in the domestic economy, but imported inflation pressure also became prominent. Data showed that the March manufacturing PMI was 50.4%, up 1.4 percentage points from the previous month, returning to the expansion zone after two months, with an increase higher than the average of the same period in recent years.

From the perspective of sub-data, the recovery of the demand side was a bright spot. The new orders index rose by 3.0 percentage points to 51.6%, higher than the production index of 51.4%, driving the acceleration of production expansion. The new export orders index rose by 4.1 percentage points to 49.1%, benefiting from the moderate recovery of global trade and the “export rush” effect in some industries. The prosperity of small and medium-sized enterprises (SMEs) improved significantly: the PMI of small enterprises rose by 4.5 percentage points month-on-month to 49.3%, while the PMI of large enterprises rose steadily to 51.6%.

It is worth noting that imported inflation pushed up raw material prices sharply. The March purchase price index of major raw materials reached 63.9%, up 9.1 percentage points month-on-month, and the purchase price indices of oil, chemical and other industries were all above 70.0%. Affected by this, the ex-factory price index rose by 4.8 percentage points to 55.4% synchronously, but the increase was less than that of the purchase side, which may squeeze the profit space of midstream and downstream enterprises. In terms of the non-manufacturing sector, the service sector business activity index rose to 50.2%, but the prosperity of consumer services declined, and the construction industry remained in the contraction zone, indicating that the foundation for economic recovery is not yet solid.