China Center Chart of the Week: China’s manufacturing PMI should be taken with a growing grain of salt

This China Center members-only chart shows the performance of China’s official manufacturing Purchasing Managers’ Index (PMI) since January 2010, along with its major subcomponents. In April the index decreased to 50.6, from 50.9 in March, leading many observers to asses a deceleration in what was previously considered an ongoing manufacturing rebound. While the sector does appear to have a bit of momentum, it’s important to more fully explicate the signals the PMI is currently sending. Furthermore, due to the myriad caveats surrounding the proper interpretation of PMI data, we urge members to view this index with great caution, and not use it as a key input to business planning assumptions.

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