China's manufacturing activity expanded at the quickest pace in five months as output and domestic orders increased, according to a survey by CLSA Asia- Pacific Markets.
The Purchasing Managers' Index rose to 54.4 in March from 52.8 in February, CLSA said today in an e-mailed statement. A separate report, published jointly by the China Federation of Logistics and Purchasing and the National Bureau of Statistics, also showed a higher reading.
Rising domestic consumption may help the world's fastest- growing major economy weather a slowdown in exports as the global economy cools. Retail sales increased at the quickest pace in at least nine years in January and February.
``Chinese manufacturing is revealed to be growing rapidly, mainly due to the strength of orders from the domestic economy,'' said Eric Fishwick, head of economic research at CLSA in Singapore.
The worst snowstorms in half a century disrupted activity in January and February.
The CLSA index is based on replies to questionnaires sent to purchasing executives at more than 400 industrial companies. The survey tracks changes in output, new orders, employment, prices, inventories and delivery times. The data is seasonally adjusted.
``It was the insight into inflationary pressures that was most valuable,'' said Fishwick. ``And worryingly, input, output and export price indices all hit record highs in March.''
China's inflation surged to an 11-year high of 8.7 percent in February.
The output index rose to 55.6 in March from 53.2 in February, while the index of new orders climbed to 57.8 from 55.1. The index of export orders fell to 50.9 from 51.9.
A reading above 50 indicates an expansion and a reading below 50 a contraction.
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