China’s April Caixin manufacturing PMI came in at 50.2 vs. 51.0 expected and 50.8 last, as the overall health of China’s manufacturing sector improved for the second straight month.
Earlier today, the purchasing managers’ index (PMI) for China’s manufacturing sector arrived at 50.1 in April, down from 50.5 in March, the National Bureau of Statistics (NBS) reported.
Summary
Latest PMI data showed that the overall health of China’s manufacturing sector improved for the second month running in April, albeit at a softer pace. Output and total new work both rose slightly, though companies reported a marginal fall in new work from overseas. Buying activity meanwhile stabilised, but relatively subdued demand conditions led firms to remain reluctant to expand their inventories in April.
Prices data indicated that overall inflationary pressures softened at the start of the second quarter. Input costs and output charges both rose only marginally, with some linking lower selling prices to recent sales tax reforms. Encouragingly, business confidence regarding the one-year outlook for production improved to an 11-month high.
Latest data showed that manufacturing output in China rose again in April. Though marginal, the upturn extended the current expansionary sequence to three months. New orders followed a similar trend, and rose at a softer pace than seen in March. Data indicated that subdued sales largely stemmed from weaker foreign demand, as new export business fell for the second time in the past three months.
Commenting on the China General Manufacturing PMIâ„¢ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:
“The Caixin China General Manufacturing Purchasing Managers’ Index eased to 50.2 in April, down from a recent high of 50.8 in the previous month, indicating a slowing expansion in the manufacturing sector. 1) The subindex for new orders fell slightly despite remaining in expansionary territory. The gauge for new export orders returned to contractionary territory, suggesting cooling overseas demand. 2) The output subindex dropped. The employment subindex returned to negative territory after hitting a 74-month high in March. According to data from the National Bureau of Statistics, the surveyed urban unemployment rate remained at a relatively high level despite edging down in March, suggesting that pressure on the job market remained. 3) While the subindex for stocks of purchased items returned to contractionary territory, the measure for stocks of finished goods fell more markedly. The gauge for future output edged up, pointing to manufacturers’ desire to produce and stable product demand. The subindex for suppliers’ delivery times rose further despite staying in negative territory, implying improvement in manufacturers’ capital turnover. 4) Both gauges for output charges and input costs edged down. There were only small changes in upward pressure on industrial product prices. We predict that April’s producer price index is likely to remain basically unchanged from the previous month.”
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