China posts upbeat factory activity; cost concerns pile

China’s manufacturing activity expanded in April, accelerating at the fastest pace in four months after the country saw an increase in demand. However, price hikes in raw materials and input costs dimmed the outlook.

The Caixin/Markit Manufacturing Purchasing Managers’ Index was read at 51.9 in April. The reading reversed from an 11-month low of 50.6 in March, surpassing a 50.8 expectation rendered by analysts. More so, the figure placed above the 50 threshold that separates expansion from contraction.

Factories, however, reported a sharp surge in input costs. Some pressures were passed onto customers as output prices continued to increase. Earlier in April, Chinese Premier Li Keqiang stressed the need for stronger market regulations to relieve struggling enterprises from rising commodity prices across the globe.