China’s factory activity remains in expansion in April

Workers are busy with production at a private enterprise’s standardized industrial plant in Zhengzhou, Henan Province, China, February 2, 2023. /CFP

Workers are busy with production at a private enterprise’s standardized industrial plant in Zhengzhou, Henan Province, China, February 2, 2023. /CFP

China’s manufacturing purchasing managers’ index (PMI) for April dipped slightly from March’s reading but remained in the expansionary territory, signaling continued recovery of industrial activity as the second quarter unfolds.

The official manufacturing PMI, a key gauge of sentiment among factory owners, registered 50.4 in April, down from the previous month’s 50.8 figure, according to data released by the National Bureau of Statistics on Tuesday.

However, it retained its position above the crucial threshold of 50, denoting ongoing expansion in factory activity.

Key highlights from the report include a notable acceleration in enterprise production, with the production index standing at 52.9. Market demand also continued its expansionary trend, as shown by the new orders index standing at 51.1.

Moreover, the emergence of new growth drivers persisted, with the PMIs for equipment manufacturing and high-tech manufacturing registering 51.3 and 53.0, respectively.

“While the macroeconomic operation maintains a trend of recovery and improvement, the optimization of structure, structural adjustment and the formation of new growth drivers are accelerating,” said Cai Jin, vice president of the China Federation of Logistics & Purchasing, according to a CCTV report.

Meanwhile, China’s non-manufacturing PMI, tracking sentiment in the service and construction sectors, stood at 51.2 in April, down from March’s 53.0.

The Caixin/S&P Global manufacturing PMI showed a similar growth trend, rising to 51.4 in April from 51.1 in March.

The Caixin/S&P PMI focuses more on small and medium-sized private manufacturing enterprises, while the official PMI represents a broader spectrum of the manufacturing sector, including large state-owned enterprises.