April EPMI edged down slightly, but the jump in export orders shows the resilience of China's exports
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April EPMI edged down slightly, but the jump in export orders shows the resilience of China's exports
Nomura expects China's official manufacturing PMI in April to fall from 50.4 in March to 50.1, while arguing that stronger export orders in the EPMI components support the view that China's exports may relatively benefit amid the global oil and gas shock.
- China's emerging industries PMI fell slightly to 57.4 in April from 57.6 in March, a decline of 0.2 percentage points, in line with seasonal changes in comparable Lunar New Year years.
- Nomura expects the official manufacturing PMI to ease to 50.1 in April from 50.4 in March, reflecting seasonal factors and guidance from the EPMI trend.
- The EPMI new export orders sub-index rose 4.8 percentage points month over month, reaching the 91st percentile of the past four years, mainly driven by high-end equipment and new energy industries.
- The report believes that China's stable power supply system and advantages in supplying green energy products may allow Chinese exporters to benefit indirectly again amid the global shock.
- Attention is needed on shipping disruptions caused by a closure of the Strait of Hormuz; the report estimates that China's exports to the top ten Middle East destinations fell 56.8% year over year in March, and these destinations account for about 5% of China's total exports.
Report interpretation
Overview
This report focuses on China's April EPMI and changes in its components to assess the short-term resilience of China's manufacturing and exports against the backdrop of the global oil and gas shock. It notes that the overall slight decline in EPMI is largely consistent with seasonal patterns after the Lunar New Year timing shift, while the significant improvement in the new export orders component shows continued support from the export side.
Core views
The core view is that China's April EPMI fell from 57.6 to 57.4, with a limited decline consistent with historical seasonality; based on this, Nomura expects the official manufacturing PMI to fall from 50.4 to 50.1. More importantly, the new export orders component jumped into a four-year high range, indicating resilience in exports related to high-end equipment and new energy. China's stable power supply and advantages in supplying green energy products may enhance its relative competitiveness amid the global oil and gas shock. However, shipping disruptions triggered by a closure of the Strait of Hormuz could pressure exports to certain regions.
Analysis framework
The report uses a combination of high-frequency activity indicators and seasonal comparison: it first compares the March-to-April changes in 2026 EPMI with years such as 2015, 2018, 2021, and 2024 that had similar Lunar New Year timing, and then combines the EPMI new export orders component, industry sources, and Middle East export data to judge export resilience and the spillover effects of the oil and gas shock.
Methodology notes
Use years with similar Lunar New Year timing to calibrate the March-to-April change in EPMI.
The report points out that in comparable years such as 2015, 2018, 2021, and 2024, EPMI fell by an average of 0.2 percentage points from March to April, consistent with the change in April 2026, suggesting that this decline reflects seasonality more than a trend deterioration.
Use EPMI and historical seasonality to infer the short-term direction of the official manufacturing PMI.
The official manufacturing PMI also shows similar seasonality, with an average decline of 0.3 percentage points from March to April historically; therefore, the report expects the April official manufacturing PMI to fall from 50.4 to 50.1.
Assess the resilience of external demand through the EPMI new export orders component.
In April, the new export orders component rose 4.8 percentage points month over month and reached the 91st percentile of the past four years; the report attributes this to support from the high-end equipment and new energy industries.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- China MacroeconomyEPMI and the official manufacturing PMI reflect short-term manufacturing activity.
- Strengths
- EPMI remains at a relatively high level, and the export orders component improved significantly.
- Weaknesses
- The official manufacturing PMI is expected to decline slightly, indicating that overall activity is not accelerating across the board.
- Comparison
- The March-to-April 2026 change in EPMI is consistent with the average seasonal change in years with similar Lunar New Year timing.
- Risks
- Seasonal disturbances may mask real demand changes, and external shocks may continue to transmit.
- China Export ChainThe new export orders component directly points to external demand performance.
- Strengths
- High-end equipment and new energy industries drove the rise in new export orders.
- Weaknesses
- Exports to some Middle East destinations have already declined significantly.
- Comparison
- New export orders are at the 91st percentile of the past four years, significantly stronger than normal levels.
- Risks
- A closure of the Strait of Hormuz and shipping disruptions may weaken deliveries and regional demand.
- New Energy and High-end Equipment IndustriesThe report believes these industries are key drivers of the improvement in export orders in April.
- Strengths
- They benefit from China's advantages in supplying green energy products and its stable power supply system.
- Weaknesses
- If global logistics are disrupted or end demand slows, order strength may be hard to sustain.
- Comparison
- Compared with general manufacturing exports, high-end equipment and new energy performed more strongly.
- Risks
- Energy prices, trade policy, and shipping bottlenecks may alter export competitiveness.
Key data
- April EPMI57.4March was 57.6, a month-over-month decline of 0.2 percentage points.
- Expected April Official Manufacturing PMI50.1March was 50.4, and the report expects a month-over-month decline of 0.3 percentage points.
- April EPMI New Export Orders Componentup 4.8 percentage points month over monthReached the 91st percentile of the past four years.
- Change in Exports to Top Ten Middle East Destinationsdown 56.8% year over year in March 2026These destinations account for about 5% of China's total exports.
- Research Publishing EntityNomura International (Hong Kong) Ltd. (NIHK)The report was published by NIHK in Hong Kong.
Impact & implications
The implication for investment and macro judgment is that China's overall manufacturing activity may ease moderately in the short term, but the export chain has not weakened in tandem, especially industries related to high-end equipment and new energy, which may benefit from global energy supply disruptions and the stability of China's supply. At the same time, shipping disruptions and weaker Middle East demand may create regional drag, so the market needs to distinguish between structural export resilience and localized logistics shocks.
Risks
- A closure of the Strait of Hormuz could cause shipping disruptions and affect China's exports to the Middle East and related routes.
- EPMI is heavily affected by the Lunar New Year timing shift, and single-month data may contain seasonal noise.
- The official manufacturing PMI is expected to decline, indicating that overall manufacturing activity still faces pressure to slow.
- If the global oil and gas shock further raises costs or suppresses demand, export resilience may weaken.
What to watch
- Whether the official manufacturing PMI in April falls to 50.1 as the report expects.
- Whether the elevated level of the EPMI new export orders component can continue in subsequent months.
- Whether high-end equipment and new energy exports continue to support overall exports.
- The duration of shipping disruptions related to the Strait of Hormuz and their impact on exports to the Middle East.
- Whether China's exports to the top ten Middle East destinations recover from the sharp year-over-year decline in March.