China’s manufacturing sector grows steadily in April – Caixin PMI
China’s manufacturing sector saw growth in the start of 2024 second quarter, with April’s Caixin PMI data indicating a rise in activity.
The report highlights an increase in new orders, both domestic and international, leading to accelerated output growth. However, caution persists among manufacturers regarding hiring, despite accumulating backlogs.
Additionally, the data reveals a contrast where input costs rise while average selling prices decline, posing challenges for profitability.
The seasonally adjusted PMI climbed to 51.4 in April, signaling the sector’s sixth consecutive month of improvement, the most pronounced growth in 14 months.
Robust demand conditions, with new orders expanding at the fastest pace in over a year, primarily drove this expansion.
International demand experienced significant growth, reaching its highest level in nearly three-and-a-half years. Chinese manufacturers responded by increasing production levels, leading to additional backlog accumulation, particularly in the investment goods sector.
Despite capacity pressures and rising new work inflows, employment levels fell for an eighth consecutive month in April, attributed to resignations and redundancies resulting from sectoral restructuring.
Input price inflation accelerated, but manufacturers faced challenges passing on increased costs to consumers, reflecting limited pricing power amidst heightened competition.
Looking ahead, sentiment remains positive, though slightly subdued, as concerns over rising costs and competition persist. Nevertheless, firms remain hopeful for sales growth as economic conditions continue to improve, signaling cautious optimism for the sector’s future.
