Chinese Manufacturing Sector Expands in April

manufacturing
  • Chinese Manufacturing Sector Expands in April

The manufacturing sector in the world’s second-largest economy grew at a 51.1 in April, up slightly from the 51.0 recorded in March.

The report released by Markit, showed operating conditions have now improved in each of the 11 months.

According to panellists, output was raised in line with higher new order inflows. Indeed, latest data showed that total new business rose at the start of the second quarter, albeit at the slowest pace for seven months. Data indicated that weaker demand in international markets had partly weighed on overall growth, with new export sales declining for the first time since November 2016 (though only marginally).

Subdued demand conditions coincided with a further reduction in headcounts in April. A number of companies commented on the non-replacement of voluntary leavers alongside efforts to improve operating margins. That said, the rate of job shedding was only slight, having eased to the least marked for three months. Concurrently, higher new work placed further pressure on operating capacities, as highlighted by a sustained rise in backlogs of work.

Companies continued to increase their purchasing activity in response to greater new order volumes. Although improving from March, the pace of growth remained modest overall. At the same time, companies were relatively cautious with regards to inventories, with stocks of finished items and purchased inputs both rising only slightly.

Delivery times for inputs at Chinese goods producers continued to increase in April amid reports of capacity pressures at suppliers. That said, the rate at which lead times lengthened was moderate.

Inflationary pressures were relatively muted in April, with the rate of input price inflation little-changed from March and output charges rising only modestly.

Confidence towards the year ahead dipped to a four-month low in April, with some firms citing concerns over future market conditions and the strength of global demand.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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