BEIJING, April 30 - China’s manufacturing sector expanded in April at a pace not seen since the end of 2020, propelled by higher output and a surge in new orders, a private survey showed on Thursday.
The RatingDog China General Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 52.2 in April from 50.8 in March, according to the survey. The reading beat analysts' forecasts of 51.0. The 50-point mark separates expansion from contraction.
Recovery driven by demand and price effects
Yao Yu, founder at RatingDog, said the April PMI readings "further confirmed that China’s economy is in the recovery stage. The structural data shows that this recovery is driven by the growth of orders and the optimistic expectations of enterprises brought about by the price effect."
Survey respondents pointed to several factors behind rising production, including stronger demand, operational improvements and new product launches. The upturn in output was recorded at the fastest rate since June 2024, the survey noted. The expansion was broad-based across sectors and was strongest in consumer goods production.
Orders, exports and backlogs
New orders surged in April, and new export business expanded for the fourth consecutive month, marking the longest run of export growth since the first half of 2024. Outstanding business rose across all three subsectors monitored by the survey, with investment goods producers reporting the sharpest accumulation of work in hand.
Despite higher volumes and rising backlogs of work for a third straight month, firms remained cautious about hiring. The survey reported that the recovery in production has not yet translated into a sustained pickup in employment, with companies reluctant to add staff.
Costs and pricing pressures
Manufacturers reported intensifying cost pressures as the Middle East war continued, driving input price inflation to its highest level in just over four years. Soaring energy and raw materials prices elevated production costs and threatened to squeeze already thin margins at factories.
In response to higher input costs, firms raised output prices at the fastest rate since October 2021, while export charges also increased at their quickest pace since October 2021. The survey observed that some exporters were able to pass additional costs on to buyers, while others continued to face margin pressure.
Sentiment and broader economic context
Overall, manufacturers reported improved sentiment about the year-ahead outlook in April, with expectations stronger than in March and running above the average of the past two years.
Official data included in the survey summary showed China’s economy grew 5.0% in the first quarter, at the top of the government’s full-year target range of 4.5% to 5.0%. The survey statement noted the economy showed higher resilience than many other countries to the Middle East conflict, attributing some of that resilience to ample oil reserves and a diversified energy mix.
Policy outlook
Analysts do not expect immediate, high-profile monetary easing measures from policymakers. In a research note on Tuesday, Nomura said: "As the PBOC may continue to rely on low-profile easing measures, we have decided to push out our forecasts for both a 50bp RRR cut in Q2 and a 10bp rate cut in Q4 to next year."
This survey snapshot highlights a manufacturing recovery that is broadening in output and orders but remains vulnerable to rising input costs and slow employment gains. Producers and exporters face a mixed picture of stronger demand paired with cost pressures that are affecting margins and pricing decisions.