China's manufacturing sector maintained its growth trajectory in April, not only continuing its expansion but also accelerating its pace, according to the latest data from Caixin. The manufacturing Purchasing Managers' Index (PMI) rose to 51.4 from 51.1, further progressing beyond the key 50-point mark that delineates growth from contraction.
This increased rate of growth was mostly driven by improved demand conditions. Manufacturers reported a substantial increase in incoming new orders, marking the fastest rate of growth in over a year. This growth was largely attributed to improvements in core demand conditions and boosted marketing efforts by manufacturers. Moreover, international orders increased at their highest rate in nearly three and a half years, signalling an improvement in global market demand at the beginning of the second quarter.
In response to these favourable conditions, Chinese manufacturers increased their production at the quickest pace since May 2023. However, this did lead to some accumulation of backlog orders. Among the sub-sectors, the investment goods sector exhibited the most robust growth in terms of new orders, output, and backlogs.
