HONG KONG (AP) – China’s factory activity ticked up again last month to its highest level in five years, according to an official survey released Friday, in a fresh sign that the world’s No. 2 economy is picking up steam.
The index based on a survey of purchasing managers climbed for a second straight month in March to 51.8, its strongest level since April 2012, from 51.6 in the previous month.
The PMI is conducted by the Chinese Federation of Logistics and Purchasing and is based on a 100-point scale, with numbers above 50 indicating expansion.
The report, released by the government’s statistics office, found that production and new orders expanded at a faster pace in China’s key manufacturing sector, which is a major part of the broader economy employing many millions of workers. The report’s employment sub-index rose to 50, indicating that factories stopped shedding staff.
Meanwhile, the official non-manufacturing PMI rebounded, rising to 55.1 last month from 54.2, indicating strength in China’s service sector.
China’s PMI is widely watched because it provides one of the earliest insights into the state of the economy. A private PMI compiled by financial magazine Caixin and Markit is due for released on Saturday.
The latest data adds to recent evidence that China’s economy is stabilizing. Customs data out earlier this month showed that imports and exports expanded in the first two months of the year after weakening near the end of 2016.
Officials have set an official economic growth target of about 6.5 percent this year, down from 2016’s 6.7 percent.