China’s April Manufacturing PMI Was Stronger Than Expected, with Production and Export Orders Recovering

Overview

This report analyzes China’s April manufacturing PMI performance. JPMorgan points out that both the NBS and RatingDog manufacturing PMIs were stronger than expected, with improvements in production, export orders, and future output expectations, indicating a strong start to growth momentum in 2Q. However, services and construction cooled, the employment sub-index remained in contraction territory, and the structural feature of manufacturing production being stronger than domestic demand still persists.

Core views

The core view is that manufacturing activity in April was stronger than expected, mainly driven by production expansion, recovery in export orders, and corporate inventory restocking; however, demand recovery was uneven and labor-market improvement was limited. Cost-side pressure remained high, with input prices near multi-year highs and pushing output prices upward. On the policy front, the April Politburo statement was slightly cautious, and macro policy continued to be front-loaded. Of this, 1851 hundred million yuan of funding for equipment upgrades under the “Two New” program has already been allocated this year, accounting for 92% of the full-year plan of 2000 hundred million yuan, and is expected to continue supporting investment.

Analysis framework

The report mainly compares the headline indices and sub-index changes of the NBS manufacturing PMI and the RatingDog PMI, and combines alternative data on port activity, industry sub-indices, enterprise-size sub-indices, and policy fund disbursement progress to assess manufacturing momentum, export recovery, price pressure, and the strength of policy support.

Methodology notes

• macro_indicatorsPMI diffusion index

  PMI uses 50 as the dividing line between expansion and contraction, measuring changes in manufacturing conditions through the headline index and sub-indices such as output, new orders, export orders, prices, and employment.

  This report cross-validates the NBS and RatingDog PMIs, focusing on the marginal changes in April versus March and whether they exceeded market and J.P. Morgan expectations.

• policy_trackingfront-loaded policy support

  Front-loaded policy support

  The report uses the disbursement progress of the NDRC’s second batch of 2026 “Two New” equipment-upgrade funding to measure the strength of policy support and assess its support for subsequent investment.

• alternative_dataport activity tracking

  Alternative data on port activity

  The report uses the recovery in outbound container and bulk shipping volumes to corroborate the recovery in export orders after their notable decline in March.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China macro growth

  Directly related

  Strengths

  Manufacturing PMI was stronger than expected, export orders recovered, and policy funding was front-loaded, supporting 2Q growth momentum.

  Weaknesses

  Services and construction turned weaker, the employment sub-index remained soft, and production was stronger than domestic demand.

  Comparison

  The increase in the RatingDog PMI was notably stronger than that of the NBS PMI, indicating stronger manufacturing improvement under a private-sector/market-oriented gauge.

  Risks

  Energy shocks, tariff uncertainty, and fluctuations in external demand may weaken subsequent growth.

• Manufacturing sector

  Directly related

  Strengths

  Output, new orders, export orders, and future output expectations improved, while high-tech and equipment manufacturing PMIs strengthened further.

  Weaknesses

  High energy-consuming industries fell to 47.9, and production and demand in petroleum/coal processing and chemicals were in contraction.

  Comparison

  High-tech and equipment manufacturing performed better than consumer goods and high energy-consuming industries.

  Risks

  Elevated costs, logistics disruptions, and material shortages may compress profits and affect production continuity.

• Export-linked activity

  Positively related

  Strengths

  Both NBS and RatingDog export orders rebounded, and alternative port data also showed container and bulk shipping volumes recovering after their March decline.

  Weaknesses

  The recovery in export orders still needs continued monitoring and may be affected by tariff uncertainty.

  Comparison

  Export orders improved significantly in April compared with February and March, with NBS export orders rising back above 50.

  Risks

  A slowdown in external demand, trade frictions, and changes in tariff policies may cause volatility.

• Services and construction

  Negative comparison

  Strengths

  The services expectations index improved to 55.4, and construction expectations remained at 50.5.

  Weaknesses

  Services activity fell to 49.6 and construction activity fell to 48.0, both indicating cooling in actual activity.

  Comparison

  Non-manufacturing was clearly weaker than manufacturing, showing that the economic recovery was uneven.

  Risks

  If services and construction continue to contract, they may drag on employment and domestic demand.

Key data

• NBS Manufacturing PMI50.3April reading; March was 50.4, while both J.P. Morgan and consensus expectations were 50.1.
• RatingDog PMI52.2Up 1.4 points in April from March; J.P. Morgan expected 50.5, and consensus expected 51.0.
• NBS Output PMI51.5Up 0.1 point in April from March, showing continued production expansion.
• RatingDog Output PMI53.8Up sharply by about 3.1 points in April from March, showing a clear improvement in output.
• NBS New Export Orders PMI50.3Up 1.2 points in April from March, returning to expansion territory.
• RatingDog New Export Orders PMI51.1Up 0.7 point in April from March.
• NBS Input Prices PMI63.7Still at an elevated level, only slightly down from 63.9 in March.
• RatingDog Input Prices PMI57.5Continued to rise in April, showing that cost pressure remained strong.
• NBS Non-Manufacturing PMI49.4Declined in April from 50.1 in March to contraction territory, with services and construction weakening.
• “Two New” Equipment-Upgrade Funding1851 hundred million yuanAmount allocated so far in 2026, accounting for 92% of the full-year plan of 2000 hundred million yuan; the second batch was 915 hundred million yuan.
• Estimated Investment LeveragedMore than 3800 hundred million yuanThe funding supports more than 6700 projects across 16 industries.

Impact & implications

The April PMI suggests that China’s start to 2Q may be stronger than earlier concerns over energy shocks and tariff uncertainty implied. The recovery in manufacturing production and exports provides support for short-term growth, and front-loaded policy disbursement is also expected to sustain investment resilience. However, the demand structure remains uneven, services and construction have weakened, the employment sub-index is soft, and cost pressure persists, meaning there is still uncertainty around growth quality and margin pass-through.

Risks

• Continued energy shocks and Middle East tensions may keep pushing up input costs.
• Tariff uncertainty may affect export orders and corporate production arrangements.
• Production expansion is faster than domestic demand; if end demand is insufficient, inventory and profit pressure may intensify.
• The employment PMI remains in contraction territory, indicating limited transmission from manufacturing improvement to the labor market.
• Weakening services and construction may reduce the breadth of the overall economic recovery.

What to watch

• Whether the NBS and RatingDog PMIs in May and June continue to stay above 50.
• Whether new export orders can extend the April recovery and be corroborated by port activity and actual export data.
• Whether input prices and output prices continue to run at elevated levels, and their impact on corporate profit margins.
• Project starts, equipment investment, and related industry order performance after the “Two New” equipment-upgrade funding is implemented.
• Whether services, construction, and employment PMIs rebound from contraction territory.
• Whether the divergence in conditions between high-tech and equipment manufacturing and high energy-consuming industries widens.