MNI 5 THINGS: China APR PMI Data Shows Positive Ind. Condition

     BEIJING (MNI) - The following are our key takeaways from the official China

Manufacturing Purchasing Managers' Index (PMI) data for April, released on

Monday by the China Federation of Logistics and Purchasing (CFLP) and the

National Bureau of Statistics. 

     - Headline manufacturing PMI decelerated to 51.4 in April from 51.5 in

March, though higher than 51.2 last April; and came in above the 51.2 median of

an MNI survey. April was the 21th consecutive month that manufacturing sentiment

remained above 50, which divides expansion and contraction. 

***Comment: Headline PMI remains relatively high, suggesting the momentum of

economic growth is not showing signs of slowing, which will give government and

regulators further room to push reforms.

     - The production index, at 53.1, remained the same as March, while lower

than 53.8 in April last year. The expectations index fell by 0.3 percentage

points to 58.4. High-tech manufacturing production PMI was 53.8, higher than

53.2 in March and 53.4 last April. 

***Comment: Production remains active in April. The expectations index fell

slightly, but remains relatively high. The PMI paints an optimistic picture

overall. 

     - Demand was marginally weaker. Overall new orders index decreased by 0.4

percentage points from last month to 52.9, with new export orders falling by 0.6

percentage point to 50.7.

***Comment: It is currently difficult to gauge the impact of trade tensions. The

export orders will likely surge before the trade sanction is imposed. However,

China and the US may reach an agreement soon, which makes it difficult to gauge

if export orders were indeed inflated. Investors need to be cautious of a

potential sharp fall in export orders later this year. 

     - Prices converged. Input prices fell to  53.0 in April from 53.4 in March,

while output prices rebounded to 50.2 from 48.9 last month. The difference

between the two prices is the narrowest since June last year, suggesting an

improvement of industrial companies' profit margins. It is worth keeping track

of if this trend continues.

     - Service PMI rose slightly to 54.8 in April from 54.6 in March. It was the

eighth straight month that the reading stayed above 54.0, a relatively high

level - showing the service sector is sustaining strong momentum. The

expectation index rose to 61.5 from 61.0 last month, now the eleventh

consecutive month that the index came in above 60, showing the services sector's

outlook remains quite optimistic. 

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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