Chinese Business Activity Posts First Contraction in Six Months

Young smart businessman looking at large city center. Concept of success and appreciation. Standing in front of the spectacular skyline with crowded corporate skyscrapers.

Chinese business output fell to contraction territory in March, marking the first decline since August 2021.

Source: Markit Economics

MCHI is down 1.73%.

The Composite Output index stood at 43.9 in March, below the 50.0-threshold that separates expansion from contraction. This is the first fall in six months and the quickest drop since the start of the COVID-19 pandemic in February 2020.

New business also recorded its steepest fall in over two years, with declines seen in both goods producers and services companies. Composite new export work fell by the fastest in 22 months, while business confidence plunged to its lowest since May 2020.

Caixin Insight Group Senior Economist Dr. Wang Zhe attributed the contraction to the resurgence of COVID-19 cases as China faces its most severe outbreak since the start of the pandemic in 2020.

Input prices also increased to a five-month high during the month, while prices charged eased.




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