The manufacturing sector in China has seen continued improvement in April, with both supply and demand expanding rapidly. This was evident in the rapid increase in output and new orders for manufacturing enterprises, as indicated by the Caixin/S&P purchasing managers index (PMI) survey. According to Wang Zhe, a senior economist at Caixin Insight Group, this growth exceeded analysts’ expectations and represented the fastest pace since February 2023.
The transportation and logistics systems operated smoothly, contributing to the overall positive outlook for the sector. This was also reflected in the official PMI from China’s National Bureau of Statistics, which showed growth with an index of 50.4 points in April compared to 50.8 in March. However, despite this growth, businesses are facing challenges such as rising input costs and competition. Zhao Qinghe of the NBS noted that while demand for products in industries such as automobiles, machinery, and electrical equipment was strong, manufacturers were facing higher costs of raw materials like metals and crude oil.
Despite increased purchases and inventory levels reflecting positive sentiment among businesses, the labor market has not seen improvement. An ongoing decrease in job numbers was attributed to restructuring efforts and resignations. As input costs remain high and selling prices low, manufacturers are experiencing a squeeze on profits. Despite these challenges, Wang Zhe emphasized that while businesses are optimistic about future growth prospects
