China's PMI at 2-month low in April but factory activity grows
By Wang Yanlin |
April 24, 2013, Wednesday
|
Print Edition
Print Edition
CHINA'S manufacturing activity may fall to a two-month low in April, disappointing investors again, as the world's second-largest economy underperforms, a survey showed yesterday.
The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest available indicator of China's industrial sector's vitality, stood at 50.5 in April, down from last month's final reading of 51.6.
A reading above 50 means expansion. April may be the sixth consecutive month that the HSBC's PMI, geared toward private and export-oriented firms, is seen to expand.
Qu Hongbin, chief economist for China and co-head of Asian Economic Research at HSBC Holdings Plc, said China's manufacturing still grew modestly in April although the PMI came in at a two-month low.
"The activity advanced at a much slower pace, while new export orders contracted again after a temporary rebound in March, suggesting external demand for China's exports remains weak," Qu said.
But he said China may work to boost domestic investment and consumption in the coming months.
The component indices showed that both output and new orders increased more slowly while new export orders contracted.
Zhang Zhiwei, an economist at Nomura, said it is rare for China's manufacturing to weaken in April which normally sees stronger industrial activity. Over the past seven years, the PMI in April has risen five times, fallen once and was flat once.
Nomura projected that China's economic growth has peaked in the first three months of this year at 7.7 percent, and will trend lower to 7.5 percent, 7.4 percent and 7.2 percent in the following three quarters.
China's weaker-than-expected economic expansion, which slowed from 7.9 percent in the final quarter of last year, has triggered calls for the government's tightening policies to be lifted, especially when inflation eased to 2.1 percent in March from February's 10-month high of 3.2 percent.
But officials said the government will continue the current monetary policy stance.
The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest available indicator of China's industrial sector's vitality, stood at 50.5 in April, down from last month's final reading of 51.6.
A reading above 50 means expansion. April may be the sixth consecutive month that the HSBC's PMI, geared toward private and export-oriented firms, is seen to expand.
Qu Hongbin, chief economist for China and co-head of Asian Economic Research at HSBC Holdings Plc, said China's manufacturing still grew modestly in April although the PMI came in at a two-month low.
"The activity advanced at a much slower pace, while new export orders contracted again after a temporary rebound in March, suggesting external demand for China's exports remains weak," Qu said.
But he said China may work to boost domestic investment and consumption in the coming months.
The component indices showed that both output and new orders increased more slowly while new export orders contracted.
Zhang Zhiwei, an economist at Nomura, said it is rare for China's manufacturing to weaken in April which normally sees stronger industrial activity. Over the past seven years, the PMI in April has risen five times, fallen once and was flat once.
Nomura projected that China's economic growth has peaked in the first three months of this year at 7.7 percent, and will trend lower to 7.5 percent, 7.4 percent and 7.2 percent in the following three quarters.
China's weaker-than-expected economic expansion, which slowed from 7.9 percent in the final quarter of last year, has triggered calls for the government's tightening policies to be lifted, especially when inflation eased to 2.1 percent in March from February's 10-month high of 3.2 percent.
But officials said the government will continue the current monetary policy stance.
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