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China's manufacturing sector expansion slowed at the start of the second quarter of the year. A renewed fall in new export orders, which was often attributed to the impact of tariffs, led to a slower and only marginal rise in total new work. As a result, production growth likewise eased on the month. Firms also lowered their inventory levels as business optimism fell. Concurrently, reduced capacity pressures led to the resumption of job shedding in April. Input prices meanwhile fell at a slower rate amid tariff-related disruptions. Chinese manufacturers opted to continue sharing these cost savings with clients by lowering their selling prices. The headline seasonally adjusted Purchasing Managers' Index (PMI) ' a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy ' posted 50.4 in April, down from 51.2 in March. The latest reading is the lowest recorded since January. That said, this marked the seventh successive month in which the index has posted above the neutral 50.0 mark to signal an improvement in manufacturing sector conditions. Contributing to the lower headline reading was a slower increase in total new orders in April. Manufacturing output growth likewise slowed in April. Firms maintained an optimistic outlook for output amid hopes that new product development and supportive government policies could spur sales in the year ahead. April data also revealed that purchasing activity growth softened. Trade disruptions and supply-side constraints resulted in a slight lengthening of supplier lead times in April. However, greater competition among vendors amid subdued demand for inputs led to another drop in average input costs in April. Firms often shared cost savings with their customers, and lowered their selling prices for a fifth straight month in April. Exporters also cut their prices, with average export charges declining for a third successive month. Powered by Commodity Insights
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