April PMI data signals continued expansion

The Chinese economy continues to show signs of recovery, with measures of manufacturing and non-manufacturing activity remaining in expansion territory for April, official data from the National Bureau of Statistics (NBS) showed on Thursday.

The bureau’s purchasing manager’s index for China’s manufacturing sector eased to 50.8, down from 52 in March, while the index for the non-manufacturing sector firmed to 53.2 from 52.3.

A reading above 50 indicates expansion while a reading below 50 reflects contraction.

“The continued improvement in both the manufacturing and non-manufacturing sectors came as, domestically, COVID-19 containment was further enhanced in April, while work and production resumption accelerated,” said Zhao Qinghe, a senior NBS statistician.

As of April 25, among surveyed companies, 98.5 percent of large and medium-sized enterprises had resumed production, up 1.9 percentage points from last month. In the manufacturing sector, the resumption rate reached 99.7 percent, up 1.0 point, according to the NBS.

Of note, a sub-index for production shed 0.4 percentage points to 53.7 in April, while a sub-index for new orders, gauging demand, slid to 50.2, down 1.8 percentage points.

“Demand recovered more slowly than production. As many as 57.7 percent of companies were short of orders amid weak market demand,” Zhao said.

Uncertainty in foreign trade also increased as global economic activities have been severely constrained by the global spread of the pandemic.

Sub-indexes measuring exports and imports fell 12.9 and 4.5 percentage points to 33.5 and 43.9, respectively.

In the non-manufacturing sector, a sub-index for business activity in the construction industry added 4.6 points from the previous month to 59.7, while that for the service sector stood at 52.1, up 0.3 points.

Expansion was also seen in most service industries, pushed by policies to restore production and expand consumption.

Fourteen out of 21 surveyed industries in the service sector reported readings above 50. Specifically, a business activity index for the retailing industry marked a second consecutive month above 60.

The catering industry also warmed in April with its sub-index exceeding 60 as food-and-beverage consumption resumed around the country.