China: Manufacturing PMI moderates to six-month low in April
May 1, 2017
The manufacturing Purchasing Managers’ Index (PMI) fell from March’s 51.8% to 51.2% in April, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP), which publish the index. The reading was below the 51.7% that market analysts had expected and represented the lowest print since October 2016. Despite April’s moderation, the index rests comfortably above the 50% threshold that separates expansion from contraction in the manufacturing sector.
April’s reading reflected a broad-based deterioration as all but two of the sub-components of the index lost ground compared to March’s result. New orders declined to a seven-month low, while employment prospects and output also declined in the same month. Conversely, inventories were stable, while the supply delivery times category improved mildly. Input prices—a reliable leading indicator for producer prices—declined to a 10-month low in April, suggesting that overall inflationary pressures are gradually stabilizing. After hitting a nearly five-year high in March, new exports declined to a seven-month low as the pick-up in global demand is losing some strength. Overall, April’s reading signals to a moderation in growth following a surprisingly strong start to the year.