China’s manufacturing PMI edges upward
Print Edition
CHINA’S manufacturing activity expanded at a faster pace in April, extending improvement for the second month in a row, a survey showed yesterday.
Analysts said the latest figures indicated stabilization in the industrial sector, although the improvement was modest.
The official Purchasing Managers’ Index, a comprehensive gauge of operating conditions in mainly state-owned companies, rose to 50.4 from March’s 50.3, the China Federation of Logistics and Purchasing said.
A reading above 50 indicates expansion.
Zhao Qinghe, an economist at the National Bureau of Statistics, said the reading reflected a recovery in market demand.
“China’s manufacturing sector has been stabilizing, with demand, especially domestic demand, growing,” Zhao said.
Component indexes showed new orders rising to 51.2, up 0.6 points from the previous month, and they were the biggest contributor toward the improvement. New export orders, however, dropped to 49.1, down from 50.1 in March. Production, at 52.5, was also weaker than the 52.7 in March.
“Although there are some positive signs, recovery in the manufacturing sector seems to be on a weak foundation,” Zhao said.
The HSBC Flash China Manufacturing Purchasing Managers’ Index, weighted toward private and export-oriented firms, also saw a modest rebound in April.
Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said the improvement in both PMIs reflected a cyclical upturn supported by recent pro-growth targeted policies.
“Indeed, we have observed that the crude steel output has increased in April, in line with an acceleration of newly-started projects during the same period,” Zhou said. “In the meantime, commodity prices also rebounded after falling for three months and the growth outlook has improved somewhat, although the downward pressure remains.”
The State Council unveiled a set of measures over the past month, including lower reserve requirements for rural banks and speeding up railway construction, to support growth and employment after first-quarter gross domestic product growth eased to 7.4 percent, the slowest in 18 months.
Sheng Laiyun, a national statistics bureau spokesman, said earlier that China’s economy would be able to meet its 7.5 percent growth target this year.
However, the Chinese Academy of Social Sciences, a government think tank, forecast on Tuesday that growth may slow to 7.4 percent due to uncertainties.
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