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China manufacturing activity worsens in April, survey shows

By Wang Yanlin | May 4, 2015, Monday | Online Edition

MANUFACTURING activity in China's private and export-oriented companies deteriorated in April with the fastest pace seen in one year, a survey showed today.

The HSBC Purchasing Managers' Index, an indicator of operating conditions in the industrial sector, landed at 48.9 last month, down from 49.6 in March and lower than the previous flash reading of 49.2, according to HSBC and research firm Markit.

A reading below 50 means contraction, and the April figure pointed at deterioration for the second consecutive month.

In comparison, the official PMI, compiled by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, remained at 50.1 -- the same as that in March which meant a marginal expansion of activity in state-owned industrial companies.

Qu Hongbin, chief economist for China at HSBC, said China's manufacturing sector had a weak start to the second quarter.

"Total new business of the HSBC PMI declined at the quickest rate in one year while production stagnated," Qu said. "Fewer new orders appeared to stem from weaker domestic demand, as new business from abroad showed tentative signs of improvement."

Qu said the data indicated that more stimulus measures may be required to ensure the economy doesn't slow further from the rate in the first quarter.

China's economic growth moderated to 7 percent in the first three months, the weakest quarterly expansion in six years and prompting the central bank to take the surprising policy-easing actions including cuts of both interest rate and reserve requirement ratio in the past two months.

EconomyPMI


 

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