In recent months, China has experienced a rapid increase in new export orders, with the manufacturing sector seeing continued improvement. The Caixin/S&P purchasing managers index (PMI) survey revealed that output and new orders for manufacturing enterprises increased at a fast pace in April, exceeding analysts’ expectations and representing the fastest growth since February 2023.
This positive outlook was attributed to several factors, including strong demand for products in industries such as automobiles, machinery, and electrical equipment. Transportation and logistics systems also operated smoothly, contributing to the overall positive outlook for the sector. However, despite increased purchases and inventory levels reflecting positive sentiment among businesses, the labor market has not seen improvement. An ongoing decrease in job numbers was attributed to restructuring efforts and resignations.
Both PMI surveys highlighted rising input costs and competition as challenges for manufacturers. Zhao Qinghe of the NBS noted that while demand for products in these industries was strong, manufacturers were facing higher costs of raw materials like metals and crude oil. This has led to businesses reducing prices to attract orders and showing caution in hiring more workers. Despite this challenge, manufacturers are optimistic about future growth opportunities as they continue to improve their supply chains and expand their operations globally.