China's manufacturing sector showed overall stability in April, with the Purchasing Managers' Index (PMI) registering at 50.3%, a slight decrease of 0.1 percentage points from the previous month.
Data released on April 30 indicated that the manufacturing PMI remained in expansion territory, though it dipped marginally compared to March.
The non-manufacturing business activity index fell to 49.4%, down 0.7 percentage points from the prior month. The composite PMI output index stood at 50.1%, declining by 0.4 percentage points but remaining above the 50-point threshold that separates expansion from contraction, indicating continued growth in overall economic output.
Key observations from the April PMI data include:
Manufacturing PMI has stayed above the expansion threshold for two consecutive months. 1. Both production and demand continued to expand. The production index reached 51.5%, while the new orders index was 50.6%, both above the critical 50-point mark, reflecting sustained growth in manufacturing output and market demand. Industries such as railway, ship, aerospace equipment, electrical machinery, and computer/communication electronics showed strong performance, with production and new orders indices above 53.0%. In contrast, sectors like petroleum/coal processing and chemical raw materials saw indices below 50%, indicating weaker market activity. 2. PMI readings for large, medium, and small enterprises all remained in expansion territory. Large enterprises recorded a PMI of 50.2%, staying above 50 for the fifth straight month. Medium and small enterprises saw PMI readings of 50.5% and 50.1%, rising by 1.5 and 0.8 percentage points respectively, indicating a notable recovery in business sentiment. 3. Key sectors maintained expansion. High-tech manufacturing and equipment manufacturing PMI stood at 52.2% and 51.8%, up 0.1 and 0.3 percentage points, respectively. The consumer goods industry PMI was 50.7%, remaining in growth territory. However, energy-intensive industries saw a PMI of 47.9%, down 1.0 percentage point, reflecting a contraction in activity. 4. Price indices remained elevated. Influenced by fluctuations in commodity prices, the input price index and ex-factory price index registered 63.7% and 55.1%, staying at relatively high levels and indicating significant upward pressure on manufacturing costs and selling prices. 5. Business expectations strengthened. The production and business activity expectation index rose to 54.5%, up 1.1 percentage points for the third consecutive month, signaling growing confidence among manufacturers.
Non-manufacturing business activity declined in April: 1. Services sector activity softened. The services business activity index fell to 49.6%, down 0.6 percentage points. While industries like railway transport, postal services, and telecommunications maintained strong growth with indices above 55.0%, wholesale, retail, and residential services sectors saw indices below 50%, indicating weaker performance. 2. Construction sector activity weakened. The construction business activity index dropped to 48.0%, down 1.3 percentage points, though business expectations held steady at 50.5%.
Among the five sub-indices composing the manufacturing PMI, production and new orders indices remained above 50, while raw material inventories, employment, and supplier delivery time indices stayed below the threshold.
The composite PMI output index of 50.1% indicates that China's overall business activity continued to expand in April, albeit at a slower pace.