Analysts at Nomura noted that the official manufacturing PMI moderated to 51.2 in April from 51.8 in March (Consensus and Nomura: 51.7).
“The PMIs for large and medium-size enterprises fell, but remained above the expansion/contraction threshold of 50, while the PMI for small enterprises rose to the 50.0 mark for the first time in more than two years, possibly benefitting from rising investment demand. By component, most sub-indices moderated in April. The output sub-index fell by 0.4 percentage points (pp) to 53.8 and the new orders sub-index by 1.0pp to 52.3, but remains well inside expansive territory.
Meanwhile, the purchasing price sub-index fell sharply by 7.5pp to 51.8, pointing to further easing of inflationary pressures on the producer side. The business expectations sub-index also continued to moderate. The still-high output and new orders sub-indices suggest growth momentum likely remained resilient in April, albeit slower than in a strong March. Looking ahead, we see downside pressures looming and maintain our call for a shallow slowdown through the course of this year.