China manufacturing PMI forecast to slip to 50.1 in April. Mid East war lifts input costs

China's official manufacturing PMI is forecast to ease to 50.1 in April from 50.4 in March, as Iran war-driven energy costs pressure factory margins, a Reuters poll of 27 economists shows. Summary: The official manufacturing PMI is forecast at 50.1 for April, down from 50.4 in March, according to the median estimate from a Reuters poll of 27 economists, with the data due from the National Bureau of Statistics on Thursday China's Q1 GDP grew 5%, hitting the upper end of the government's annual target, and industrial profits expanded at their fastest pace in six months in March, providing a relatively stable baseline ahead of the PMI release Factory-gate prices reversed a 41-month deflationary run in March, rising sharply in energy-intensive sectors including non-ferrous metal mining, though ANZ analysts have described cost-push inflation of this kind as negative for growth The People's Bank of China kept benchmark loan prime rates on hold for an eleventh consecutive month last week, with Q1 momentum and a pickup in inflation reducing pressure for fresh easing Moody's revised China's sovereign outlook to stable from negative earlier this week, citing resilient economic and fiscal fundamentals China's top leadership acknowledged a strong start to 2026 but flagged difficulties ahead, pledging to strengthen energy security and pursue greater technological self-sufficiency The extent to which China's strategic reserves, diversified energy mix and robust electronics export demand continue to insulate the economy from the Iran conflict's fallout is the central question the April data will begin to answer China's official manufacturing purchasing managers' index is expected to slip to 50.1 in April from 50.4 in March, according to the median forecast from a Reuters poll of 27 economists, with the National Bureau of Statistics set to publish the result on Thursday. The reading would mark the third consecutive month of expansion in the factory sector but at a pace that points to increasing strain from the energy price shock flowing through global supply chains since the escalation of the US-Israeli war on Iran. The broader economic backdrop entering the release is more resilient than many had feared at the start of the year. GDP expanded 5% in the first quarter, landing at the upper end of Beijing's annual growth target, and industrial profits rose at their quickest rate in six months in March. That combination has reduced immediate pressure on policymakers to deploy large-scale stimulus, a position reinforced by Moody's decision earlier this week to revise China's sovereign outlook to stable from negative, citing what the agency described as resilient economic and fiscal strength. The People's Bank of China kept benchmark loan prime rates unchanged for an eleventh straight month last week, consistent with a central bank that sees sufficient momentum to hold its fire on further easing. But the conditions underpinning that relative optimism are showing signs of strain. Factory-gate prices in China ended a 41-month deflationary run in March, with prices climbing in energy-intensive industries including non-ferrous metal mining as the costs of higher global crude and freight rates fed through to domestic producers. The distinction between demand-driven and cost-driven inflation matters considerably here. Analysts at ANZ have characterised the current configuration as unfriendly to the economy: firms absorbing higher input costs without a corresponding pickup in end-demand face margin compression rather than pricing power, and over time that dynamic risks converting a slowing PMI into an outright contraction signal. China's initial insulation from the Iran conflict has rested on three pillars: ample strategic petroleum reserves that cushioned the first wave of oil price increases, a diversified energy mix that reduces dependence on any single import corridor, and strong global demand for Chinese-made electronics that sustained export volumes