China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) showed a significant increase to 51.4 in April, surpassing the previous month’s expansion rate of 51.1. This exceeded market expectations of 51.0, indicating a strong performance in the manufacturing sector. Production expanded at the most pronounced pace since May 2023, reflecting a positive trend in output. Additionally, new export orders rose at the quickest pace in nearly three-and-a-half years, showcasing robust demand from overseas markets.
Expert Analysis
According to Wang Zhe, an economist at Caixin Insight Group, both supply and demand in the manufacturing sector expanded at a faster pace in April. Manufacturers’ output and total new orders continued to grow, with subindexes reaching new highs since May 2023 and February 2023, respectively. The increase in external demand was particularly notable, with the gauge for new export orders hitting a high not seen since November 2020. Investment goods outperformed consumer and intermediate goods both domestically and internationally, highlighting strong performance across different product categories.
Official Figures and Market Response
In contrast, China’s official Manufacturing Purchasing Managers’ Index (PMI) released by the National Bureau of Statistics (NBS) fell to 50.4 in April, down from 50.8 in March. The Non-Manufacturing PMI also dipped to 51.2 from 53.0 in the same period. Despite the positive performance of the Caixin Manufacturing PMI, the Aussie Dollar did not respond positively, with AUD/USD trading near intraday lows. The Australian Dollar showed weakness against the US Dollar, as indicated by the percentage change of major currencies displayed in the heat map.
The surge in China’s Manufacturing PMI in April reflects a strong momentum in the manufacturing sector, with production and export orders showing significant growth. While the official figures paint a slightly different picture, the overall outlook for the Chinese economy remains positive. It is important to monitor future data releases to gauge the sustainability of this growth trend in the coming months.