Official China manufacturing sector PMI races ahead in March, but analysts cautious

China's economic performance continued to exceed forecasts in March, the results of two key activity surveys revealed, although some economists continued to harbour doubts regarding the sustainability of the current pace of expansion.

The 'official' manufacturing sector purchasing managers' index rose from 51.6 for February to 51.8 in March.

That was ahead of the consensus forecast for a reading of 51.7.

In parallel, an equivalent survey for the non-manufacturing side of the Chinese economy showed activity bolted ahead during the same month, with the headline printing at 55.1, up from 54.2 in the month before.

Economists at Capital Economics put that down mainly to stronger levels of activity in services. They also cautioned that the private sector-compiled manufacturing PMI, published on the first working day of each month, was a more reliable guide to activity.

Julian Evans-Pritchard, China economist at Capital Economics, said: "In sum, today’s PMIs are consistent with broader data that show growth stabilising at a relatively rapid pace in Q1. But this strength probably won’t last. The correction in the property market still has much further to run which, in combination with policy tightening, will drive a slowdown in investment and industrial activity during the coming quarters."