China’s number of new export orders last month increased the fastest in 3.5 years, with many items attracting customers such as cars, machinery, and electrical equipment.
The purchasing managers index (PMI) survey conducted by Caixin/S&P showed that output and new orders of manufacturing enterprises increased rapidly in April. Accordingly, this index increased to 51, 4 points, from 51.1 points in March.
This is the fastest pace since February 2023 and higher than analysts’ forecast of 51. A mark above 50 reflects expanding production. In particular, the number of new export orders grew the fastest in nearly 3 and a half years.
“Overall, in April, the manufacturing sector continued to improve, with rapid expansion in supply and demand. Transportation and logistics systems operated smoothly,” Wang Zhe, senior economist at Caixin Insight Group said.
An employee works on the Nio electric vehicle production line in Hefei, Anhui province, China on August 28, 2022. Image: Reuters
According to data from China’s National Bureau of Statistics (NBS), the official PMI was at 50.4 points in April compared to 50.8 in March, marking the second consecutive month of production growth.
While the Caixin/S&P PMI focuses more on small and medium-sized private manufacturing enterprises, the NBS index represents a broader range of manufacturing, including large state-owned enterprises.
NBS senior statistician Zhao Qinghe said the new order and new export indexes of the automobile, machinery, and electrical equipment industries were all above 53, showing domestic and foreign market demand for the products. This increases.
However, both PMI surveys warn of rising input costs and competition. “Although economic activities continue to expand, many manufacturers are facing higher costs,” Zhao Qinghe said.
Wang Zhe of Caixin Insight Group Wang Zhe said manufacturers are facing a six-month high in input costs, due to high prices of raw materials such as metals and crude oil. Therefore, businesses have to reduce prices to attract orders. They also appear cautious in recruiting more workers. The number of jobs decreased for the 8th consecutive month due to restructuring efforts and resignations.
“Increased purchases and inventories reflect the positive outlook of businesses. However, employment has not improved and low selling prices are eating into profits,” Wang said.