China’s PMI Shows Industrial Activity in Expansion Mode

China’s Purchasing Managers Index rose above the expansionary threshold of 50 in April, the latest data issued by the China Federation of Logistics & Purchasing showed Friday, adding to growing signs that the worst of the output slump  may be over and that signs of improvement in the world’s third largest economy are starting to become evident.

China’s PMI rose to 53.5 in April from 52.4 in March, marking the second consecutive month that PMI (Purchasing Managers Index) was above 50 ; a figure signaling that the activity in the manufacturing sector is in an expansionary mode.

From Dow Jones: The April PMI “suggests that managers are cautiously optimistic in their outlook, following signs that the Chinese economy has bottomed out,” said Jing Ulrich, China equities chairman at J.P. Morgan….However, she said that although the data reinforce people’s confidence that the Chinese economy is starting to turn around, it would be sensible to guard against excessive optimism.

“Month-on-month and quarter-on-quarter improvements in economic indicators will be difficult to maintain, and the pathway to recovery will not be entirely smooth,” Ulrich said.

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