The Chinese manufacturing sector experienced its most significant improvement over the past five years this April, according to the latest RatingDog China General Manufacturing Purchasing Managers’ Index (PMI).
The index rose to 52.2 from March’s 50.8, marking the fifth consecutive month that the sector has stayed above the 50.0 growth threshold. The latest reading marks the strongest performance for the industry since December 2020.
This improvement comes as production levels climbed at their fastest rate since mid-2024, supported by a surge in new orders and the introduction of new products. While growth was visible across the board, the consumer goods sector was particularly strong.
The output growth was supported by a faster rise in new orders, which grew at the second-fastest rate in nearly five years.
Survey respondents attributed this growth to increased demand, improved market conditions and the introduction of innovative products. Export orders also grew for the fourth month in a row, though at a slower pace than domestic orders.
“At the structural level, both the production and demand sides demonstrated high levels of activity,” said RatingDog Founder Yao Yu.
“The motivation for enterprises to expand production came from both the increase in both quantity and price. On one hand, the objective growth of new orders was evident, as the PMI for new orders significantly improved. At the same time, new export orders have continued to expand this year,” he added.
Despite the jump in production, employment remained broadly stable in April after continuous gains in the first three months of the year. Consumer goods companies hired more staff, but companies in the intermediate and investment goods sectors saw slight staff reductions.
According to Yu, the surge in production has not yet translated into a recovery for workers, as the employment sub-index actually slipped back into contraction territory. This trend, coupled with a slight rise in urban unemployment, points toward a “jobless recovery” that could create a divide in the economic structure.
“At the same time, due to China’s macro policies always focusing on the ‘supply side’, the repair of residents’ balance sheets is still slow, and ultimately, it will manifest as the continuous lag of terminal consumption behind the growth of production,” the RatingDog CEO explained.
Supply chains continued to face challenges in April. Delivery times for raw materials lengthened due to shortages, rising prices, and geopolitical tensions, specifically in the Middle East. These factors pushed input costs to a four-year high. To protect their profit margins, Chinese manufacturers raised their own selling prices at the fastest rate seen in four-and-a-half years, passing these increased costs on to both domestic and international customers.
Looking ahead, business confidence reached a notable peak. Manufacturers expressed optimism for the coming year, citing government support, planned capacity expansions, and new projects as reasons for their positive outlook.
