Industrial activity slips back
By Wang Yanlin |
May 2, 2011, Monday
|
Print Edition
Print Edition
The expansion of China's manufacturing activities moderated again in April under the influence of a tightening policy stance, high production costs and the ripple effect of the Japanese earthquake, a survey showed yesterday.
The official Purchasing Managers' Index, a comprehensive gauge of industrial activity across the country, slipped half a percentage point from a month earlier to 52.9 percent in April, according to the China Federation of Logistics and Purchasing.
A reading above 50 points to expansion. The April figure compared with an index of 53.4 percent in March which had ended a three-month decline from February's 52.2 percent.
"Moderating industrial activities in April is a reflection of China's easing economic growth," said Xu Weihong, a Guodu Securities Co analyst. "It is not bad, as the country requires a respite to restructure its manufacturing sector and put a damper on inflation."
Component indices of the PMI showed that the employment rate remained flat in April, while stockpiles of raw materials rose and distribution time of suppliers increased. Production, new orders and export orders were all on the decline.
An encouraging sign was the drop in the input price index in April. It settled at 66.2 percent, down 2.1 percentage points from March.
Zhang Liqun, a federation analyst, said such changes may indicate that inflationary pressure will ease, but domestic consumption and exports will grow more slowly.
The gross domestic product in China expanded 9.7 percent from a year earlier in the first quarter, down from 2010's 10.3 percent and 9.8 percent in the final quarter of last year.
Meanwhile, the HSBC Manufacturing Purchasing Managers' Index was at 51.8 in April, the same as March. It was below the long-run series average of 52.3.
The official PMI is weighted toward big domestic companies while the HSBC survey is slanted toward private and export-oriented firms.
China's industrial production grew steadily at 14.4 percent year on year in the first quarter. Profits at manufacturing companies expanded 32 percent, down from 34.3 percent between January and February.
The official Purchasing Managers' Index, a comprehensive gauge of industrial activity across the country, slipped half a percentage point from a month earlier to 52.9 percent in April, according to the China Federation of Logistics and Purchasing.
A reading above 50 points to expansion. The April figure compared with an index of 53.4 percent in March which had ended a three-month decline from February's 52.2 percent.
"Moderating industrial activities in April is a reflection of China's easing economic growth," said Xu Weihong, a Guodu Securities Co analyst. "It is not bad, as the country requires a respite to restructure its manufacturing sector and put a damper on inflation."
Component indices of the PMI showed that the employment rate remained flat in April, while stockpiles of raw materials rose and distribution time of suppliers increased. Production, new orders and export orders were all on the decline.
An encouraging sign was the drop in the input price index in April. It settled at 66.2 percent, down 2.1 percentage points from March.
Zhang Liqun, a federation analyst, said such changes may indicate that inflationary pressure will ease, but domestic consumption and exports will grow more slowly.
The gross domestic product in China expanded 9.7 percent from a year earlier in the first quarter, down from 2010's 10.3 percent and 9.8 percent in the final quarter of last year.
Meanwhile, the HSBC Manufacturing Purchasing Managers' Index was at 51.8 in April, the same as March. It was below the long-run series average of 52.3.
The official PMI is weighted toward big domestic companies while the HSBC survey is slanted toward private and export-oriented firms.
China's industrial production grew steadily at 14.4 percent year on year in the first quarter. Profits at manufacturing companies expanded 32 percent, down from 34.3 percent between January and February.
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