Flash PMI data suggest private firms' production may rebound
By Wang Yanlin |
April 24, 2012, Tuesday
|
Print Edition
Print Edition
PRIVATE companies in China may see a slight rebound in manufacturing activities in April, a preliminary reading for the HSBC Purchasing Managers' Index showed yesterday.
But economists are still urging for further easing measures to support a rapidly slowing economy.
This month's HSBC Flash PMI, the earliest available indicator of China's industrial sector and which is slanted more toward private and export-oriented firms, stood at 49.1 - a two-month high but was still less than 50. A reading under 50 signals a cut in manufacturing activities. But the rate was more than the final reading of 48.3 in March.
The official PMI, compiled by the China Federation of Logistics and Purchasing and which is weighted toward state-owned enterprises, touched a one-year high of 53.1 in March.
"As April flash PMI ticked higher, it suggests that the earlier easing measures have started to work and hence should allay concerns of a sharp (economic) growth slowdown," said Qu Hongbin, HSBC's chief economist for China.
"However, the pace of both output and demand growth remains at a historical low level, and the job market is under pressure. This calls for additional easing measures in the coming months," Qu said.
He expected quicker monetary and fiscal easing in the second quarter.
Other analysts have called for another reserve requirement ratio cut this month.
China's gross domestic product grew 8.1 percent from a year earlier in the first three months, the slowest in nearly three years. Industrial production rose 11.6 percent in the first quarter, up from 11.4 percent in January and February.
But economists are still urging for further easing measures to support a rapidly slowing economy.
This month's HSBC Flash PMI, the earliest available indicator of China's industrial sector and which is slanted more toward private and export-oriented firms, stood at 49.1 - a two-month high but was still less than 50. A reading under 50 signals a cut in manufacturing activities. But the rate was more than the final reading of 48.3 in March.
The official PMI, compiled by the China Federation of Logistics and Purchasing and which is weighted toward state-owned enterprises, touched a one-year high of 53.1 in March.
"As April flash PMI ticked higher, it suggests that the earlier easing measures have started to work and hence should allay concerns of a sharp (economic) growth slowdown," said Qu Hongbin, HSBC's chief economist for China.
"However, the pace of both output and demand growth remains at a historical low level, and the job market is under pressure. This calls for additional easing measures in the coming months," Qu said.
He expected quicker monetary and fiscal easing in the second quarter.
Other analysts have called for another reserve requirement ratio cut this month.
China's gross domestic product grew 8.1 percent from a year earlier in the first three months, the slowest in nearly three years. Industrial production rose 11.6 percent in the first quarter, up from 11.4 percent in January and February.
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