China’s factory activity expands for sixth straight month | Manufacturing Asia
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China’s factory activity expands for sixth straight month

Jobs are still being shed, and business confidence is easing.

China’s manufacturing activity improved for the sixth month running in April and at the fastest clip in over a year amid a surge in demand overseas, according to a closely watched industry survey.

The headline Caixin/S&P China general manufacturing purchasing managers’ index (PMI) went up to 51.4 last month from 51.1 in March, marking the most notable improvement in the overall health of the sector in 14 months. 

Underpinning the sustained growth were strong new orders growing at the fastest pace in more than a year. New work from abroad spiked at the highest rate in nearly three and a half years as global demand for manufactured goods in China recovered.

Chinese factories ramped up both their production and purchasing activity to keep up with the demand although backlogs continued to pile up. Inventory of raw materials and semi-finished goods also continued to increase, while inventory of finished products rose for the first time in three months.

Despite improving conditions, employment in the sector remains weak with staffing levels falling for the eighth month running in April amid restructuring efforts by manufacturers.

Chinese manufacturers remained optimistic about their outlook for the sector although their level of confidence in April dipped to a four-month low due to rising costs and increased competition.

“Overall, in April, the manufacturing sector continued to improve, with accelerated expansion in supply and demand… However, employment was yet to show improvement, and price levels remained low, particularly on the sales side, eating into profits,” said Wang Zhe, senior economist at Caixin Insight Group.

READ MORE: China’s factory activity rise at fastest pace in over a year

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