BEIJING (MNI) - The China purchasing managers' index for the manufacturing
sector compiled by CLSA rose to a 48-month high in April on the back of rising
output and new orders, the Hong Kong-based
brokerage said Friday.
Employment was at its highest level since September last year, but indexes
for both input and output prices remained elevated, CLSA said.
CLSA's headline index rose to 55.4 in April, up from the previous month's
54.4.
Readings above 50 mean that the sector, or sector components, are expanding,
while readings below 50 mean contraction. The higher the reading above 50, the
faster the expansion.
"Strength was evident across the board in April. New orders jumped (export
but especially domestic) as did output. While there is understandable concern
that the weakness in the US economy will negatively impact China, there is no
evidence of it yet in these data: the PMI shows that manufacturing activity has
strengthened into the second quarter," said Eric Fishwick, CLSA's head of
economic research.
"It is costs and inflation that remain the biggest challenge for Chinese
businesses. Input and output prices both remain on a steep upward trend,"
Fishwick said.
The production index rose to 57.9 in April from 55.6 in March. Overall
orders rose further to 58.6 from 57.8, with export orders rebounding to 52.0
after March's decline to 50.9.
The employment index inched up to 51.9 from 51.5 in March.
Both the input (75.2 after 81.1) and output (62.4 after 63.0) price indexes
eased a bit in April, but remained near their record highs seen in March. There
were reports of higher prices for a range of
manufacturing inputs, including energy, steel, iron ore, and chemicals, CLSA
said.
The CLSA PMI compares with the semi-official purchasing manager's index for
China's manufacturing sector produced by the China Federation of Logistics and
Purchasing (CFLP) and National Bureau of Statistics, which rose again in April
to its highest level in more than a year.
But the results contrast with last Friday's release of the latest Xinhua
Finance/MNI China Business Sentiment Survey, which showed Chinese business
conditions deteriorated in April to their weakest level in the three-year
history of the index.
beijing@marketnews.com
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xfntm
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