China’s factory activity in March expanded at the slowest pace in almost a year on softer overall domestic demand, but underlying economic conditions remained positive even as input and output inflationary pressures intensified for manufacturers.                  

as the country is hit by the novel coronavirus outbreak, in Hangzhou, Zhejiang province, China March 2, 2020. China Daily via REUTERS

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) dropped to 50.6 last month – the lowest level since April 2020 – from February’s 50.9, missing analyst expectations for an uptick to 51.3.

The 50-mark separates growth from contraction on a monthly basis.

The findings contrast with those in an official survey which showed manufacturing activity grew at a stronger pace as large firms ramped up production after a brief lull during the Lunar New Year holidays.

Although supply chain disruption related to previous COVID-19 outbreaks eased, the private survey showed factories reported a sharp increase in input costs, which surged at their fastest clip in 40 months.