Photo: CFP

China's composite purchasing managers' index (PMI) in April stood at 54.4, which continued to maintain expansion, indicating that enterprise production and business activities continue to recover and develop, the National Bureau of Statistics said on Sunday.

Non-manufacturing business activity index was 56.4 in April. Although the figure dropped 1.8 percentage points from March, it was still above the 50-point mark that separates expansion and contraction, indicating that the non-manufacturing sector maintained high level growth.

In particular, the demand of face-to-face service industries saw a spike, driven by holiday consumption from the Spring Festival holidays in January, Qingming Festival holidays in early April and the ongoing May Day holidays, the NBS noted.

Tourism demand has driven the transportation sector to remain active. The index of new orders in the air transport industry rose for three consecutive months and remained above 70 percent. The index for new orders in the rail transportation sector remained above 63 percent for the second consecutive month, the NBS said on Sunday.

At the same time, the catering, accommodation and recreation related activities that directly reflect holiday consumption demand showed sustained momentum in both supply and demand. The business activity index and the new order index of the above industries all increased compared with March, and both remained at a high level of more than 55 percent.

The NBS pointed out that the rise of the new orders index of these service industries indicates that the May Day holidays related consumer demand will continue to be released.

However, the PMI for the manufacturing sector fell 2.7 percentage points to 49.2 percent in April, below the critical point separating expansion and contraction.

A worker performs production tasks at Harbin Electric Machinery Company Limited of Harbin Electric Corporation in Harbin, capital of northeast China's Heilongjiang Province, April 11, 2023. Harbin Electric Corporation, a veteran state-owned enterprise with a history of over 70 years, has been hailed as the cradle of China's power generation equipment manufacturing industry.(Photo: Xinhua)

Zhao Qinghe, a senior statistician of NBS, attributed previously the drop to the high base in March, which among the highest in the past two years. Rapid recovery in the first quarter pushed PMI upward over the first three months of the year.

According to analysis by the China Federation of Logistics & Purchasing (CFLP), which jointly released April PMI with the NBS, positive changes in economic activity in April remained visible following the recovery in the first quarter.

Enterprises are relatively optimistic about the future market, as the cost of production falls, cash flow of enterprises improves, and the labor market and logistics efficiency continue to improve, the impact of exchange rate fluctuations has been significantly reduced, read CFLP analysis.

The federation also pointed out that tightened exports, driven by long-term high inflation, rising interest rates and a variety of global uncertainties were a major reason for the contraction in PMI.

In April, the index of new export orders was 47.6 percent, down 2.8 percentage points from March, the second consecutive month of significant decline. The share of companies reporting weak demand in the market was 56.9 percent, up 1.6 percentage points from the previous month and the highest in 36 months, the CFLP said.

Global Times