China's manufacturing sector gathers pace in April

30th Apr 2024 09:29

(Sharecast News) - China's manufacturing sector continued to strengthen in April, closely-watched data published on Tuesday showed.

The latest Caixin General Manufacturing PMI came in at 51.4, up from 51.1 in March. The highest reading since February 2023, it was also the sixth successive month of growth.

The improvement was attributed to greater new work inflows, including from abroad, which supported faster output growth.

The survey in part mirrored official research from the country's National Bureau of Statistics, also published on Tuesday. The NBS manufacturing PMI was 50.4, above analyst expectations for 50.3 although it was down on March's 50.8.

In contrast, the NBS services PMI fell to 51.2 from 53.0 in March. Analysts had been expecting a reading closer to 52.2.

Wang Zhe, senior economist at Caixin Insight Group, said: "Both supply and demand expanded at a faster pace amid the market upturn.

"Manufacturers' output and total new orders continued to grow. The increase in external demand was even more notable, with the gauge for new export orders hitting a hit not seen since November 2020.

"Weak expectations remain one of the major hurdles facing economic development, leading to increasing pressure on employment and a greater risk of deflation.

"Therefore consistent efforts should be made to ensure earlier policies are implemented effectively and promptly, maintaining the currently economic recovery momentum and eventually improving over market expectations."

China's economy has been rocked in recent years by stringent rolling lockdowns - which continued long after the rest of the world had re-opened - the crisis in the debt-burdened property sector and a slump in demand, both domestic and global.

In response, Beijing has introduced a package of support measures. It is also trying to move the economy away from real estate towards high-end manufacturing.

The Caixin survey is focused on small and medium-sized firms, while the NBS indices covers large and state-owned companies.

A reading above the neutral 50.0 mark indicates growth, while one below it suggests contraction.