China's manufacturing sector activity showed its most significant improvement since December 2020 in April. The first-round PMI survey for the second quarter of 2026 revealed a substantial enhancement in the overall health of China's manufacturing industry, representing the most robust performance since late 2020. The seasonally adjusted Purchasing Managers' Index (PMI), a comprehensive indicator reflecting manufacturing economic conditions, registered 52.2 in April, surpassing March's reading of 50.8 and maintaining above the 50.0 expansion-contraction threshold for the fifth consecutive month. The latest figure indicates a notable improvement in manufacturing activity, marking the strongest growth since December 2020.
Stable demand, operational improvements, and new product launches collectively drove output growth to its fastest pace in nearly two years. The expansion was broad-based, with consumer goods manufacturing showing particular strength. Output expansion was supported by accelerated growth in new orders, which recorded the second-highest growth rate in nearly five years, nearly matching February's record. Manufacturers attributed the increase in new orders to rising customer demand, improved market conditions, and innovative product introductions. Expansion of sales channels provided additional growth momentum. New export orders maintained growth for the fourth consecutive month, although their growth rate remained lower than the overall expansion rate.
In April, business confidence in the year-ahead outlook strengthened significantly. Production expectations improved compared to March and exceeded the average level of the past two years. Companies anticipate sustained growth momentum based on rising market demand, continuous product innovation, capacity expansion, and efficiency improvements. Industry optimism also stems from successful new projects, business development, and policy support. Following continuous expansion in the first quarter of this year, employment levels stabilized in April. Consumer goods manufacturers increased staffing, while intermediate and investment goods manufacturers recorded slight reductions in workforce.
Backlogs of work continued to rise in April amid growing new orders. Investment goods manufacturers reported the most significant increase in backlogs. However, the overall backlog rate slowed slightly compared to March, while finished goods inventories remained largely stable.
Supply chain pressures persisted in April, with supplier delivery times continuing to lengthen. Although the rate of delivery delays slowed compared to March, ongoing raw material shortages, transportation disruptions, rising input prices, and geopolitical tensions (particularly in the Middle East) continued to affect supply chains. All three major manufacturing categories experienced supply delays in April.
Cost pressures intensified further in April, with input prices recording their fastest increase in just over four years. Manufacturers reported that rising raw material costs, higher oil prices, and geopolitical uncertainties collectively drove up input prices. Chinese manufacturers consequently raised their selling prices at the fastest rate in four and a half years, transferring manufacturing cost pressures to customers. Export prices also registered their fastest increase since October 2021. To meet rising demand, manufacturers increased purchasing activity for the fourth consecutive month, at the strongest pace in the past year. Input inventories have risen for five consecutive months, enhancing supply chain resilience.