China: PMI continues to rise while industrial production slows markedly
May 1, 2012
The Purchasing Managers' Index (PMI) published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP) rose from 53.1 points in March to 53.3 points in April. Despite the improvement, the figure came in below market expectations that had the PMI jumping to 53.6 points. The reading represents the fifth consecutive monthly increase in the index and, at the current level, the PMI is sitting at its highest point since March 2011. The April increase was mainly due to a strong expansion in the production output category, which accounts for a quarter of the total PMI, while new orders, which account for 30% of the total PMI, lost some ground. In addition, a majority of components remained above the 50-point threshold that separates expansion from contraction. Meanwhile, the input prices category, which is a reliable leading indicator of consumer prices, moderated after reaching its highest level in six months in March. Industrial production rose 9.3% in April, which was below both March's 11.9% expansion and market expectations that had industrial output increasing 12.2%. The figure represented, in fact, the weakest pace of expansion since May 2009. Owing to the softer reading, the annual average growth in industrial production slowed from 13.0% in March to 12.7% in April.