China’s RatingDog manufacturing PMI rose to 52.2 in April from 50.8 in March, the strongest reading since late 2020, beating the 51.0 forecast, as output and new orders surged and input costs hit a four-year high.
Earlier:
Summary:
- The RatingDog China General Manufacturing PMI, compiled by S&P Global, rose to 52.2 in April from 50.8 in March, beating the 51.0 consensus forecast and marking the strongest reading since late 2020
- Output grew at the fastest pace since June 2024, driven by stronger demand, operational improvements and new product launches, with the consumer goods sector leading the expansion
- New orders surged, with export orders expanding for a fourth consecutive month, the longest such run since the first half of 2024
- Input price inflation reached its highest level in just over four years, with output prices and export charges both rising at the fastest pace since October 2021 as Middle East war costs fed through to factory gates
- Employment intentions remained cautious despite rising order backlogs, which increased for a third straight month across all sub-sectors, with investment goods producers seeing the sharpest build-up
- Business sentiment improved from March and ran above the two-year average, with RatingDog founder Yao Yu attributing the recovery to order growth and price-effect optimism
- China’s Q1 GDP grew 5%, at the top of its 4.5-5% target range, with ample oil reserves and a diversified energy mix cited as key buffers against the Middle East shock
China’s manufacturing sector expanded at its fastest pace since late 2020 in April, with the private RatingDog PMI compiled by S&P Global rising to 52.2 from 50.8 in March, comfortably beating the 51.0 analyst consensus and arriving well above the official NBS manufacturing PMI reading of 50.1 published earlier in the day. The divergence between the two surveys reflects their different sampling bases, with the RatingDog index capturing a broader range of private and export-oriented firms that appear to be faring considerably better than the larger state-linked enterprises more heavily represented in the official figure.
Output growth accelerated to its fastest pace since June 2024, with firms citing stronger demand, new product launches and operational improvements. The expansion was broad-based but strongest in consumer goods. New orders surged, and export orders grew for a fourth consecutive month, the longest positive run since the first half of 2024, suggesting external demand has held up better than many had anticipated given the disruption flowing from the Middle East conflict and elevated shipping costs.
The inflation data embedded in the survey is the element most relevant to global markets. Input price inflation reached its highest level in just over four years as energy and raw material costs climbed on the back of the Iran war, and firms raised output prices at their fastest pace since October 2021. Export charges also increased at the quickest rate since that period. The pass-through was uneven: some exporters managed to transfer the additional costs to buyers, while others continued to absorb the pressure against already thin margins. The net effect is a factory-gate price environment that will add to goods inflation in import markets and complicate the disinflation picture for central banks in Europe and beyond.
The one soft note in an otherwise strong report was employment. Despite rising backlogs of work across all three sub-sectors, manufacturers remained cautious about adding staff, a signal that confidence in the recovery’s durability has not yet converted into committed hiring.
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A print of 52.2 against a 51.0 forecast and the official PMI’s 50.1 reading is a meaningful upside surprise that complicates the bearish China narrative that had built ahead of the data. The divergence between the private RatingDog survey and the official NBS figure is notable: the former captures a broader range of private and export-oriented manufacturers, and the gap between the two suggests the recovery is unevenly distributed, with larger state-linked firms faring less well than the private sector. For commodity markets, the strong output and new orders readings are a modest demand-supportive signal, though the inflation detail is the more consequential number. Input price inflation at a four-year high and output prices rising at the fastest pace since October 2021 confirm that the Middle East energy shock is feeding through to Chinese factory gate prices, which matters for global goods inflation and for trading partners absorbing Chinese exports. The employment caution is a soft underbelly: firms are not converting order strength into hiring, suggesting confidence in the durability of the recovery remains fragile.
This article was written by Eamonn Sheridan at investinglive.com.
