Slowdown in activity for China's industries
By Wang Yanlin |
May 2, 2013, Thursday
|
Print Edition
Print Edition
CHINA'S manufacturing activity grew at a slower pace in April, raising doubts about the strength of the country's economic recovery, a survey showed yesterday.
The official Purchasing Managers' Index, a comprehensive gauge of operating conditions in state-owned industrial companies, fell to 50.6 last month from March's 50.9, according to the China Federation of Logistics and Purchasing.
A reading above 50 means expansion but, although the index has been above that level for the seventh consecutive month indicating continued growth in manufacturing, analysts said the growth momentum was not as strong as expected.
"China's economic recovery was fragile," said Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd. "The official PMI appeared to be lower than expected, and its component indexes pointed to insufficient demand at both home and abroad."
The component indexes showed that new orders cut 0.6 points from a month earlier to 51.7 in April, new export orders lost 2.3 points to 48.6, while input prices slumped 10.5 points to 40.1 - all signs of weakening demand.
Zhang Liqun, an economist at the State Council's development research center, also said the PMI's dip in April indicated the foundation of China's economic recovery was not solid.
"The sharp loss in input prices was a reflection of weakening confidence among manufacturers," Zhang said. "All these showed the possibility for China's growth to slow slightly in the future. We must work to stabilize domestic demand and make our economic recovery more sustainable."
The HSBC China Manufacturing PMI, slanted toward private and export-oriented manufacturing companies, is released today. A preliminary reading showed the index retreating to 51.1 in April, compared with March's 53.
China's gross domestic product expanded 7.7 percent in the first three months, slowing from 7.9 percent in 2012's final quarter.
The weaker-than-expected economic growth has triggered calls for 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.
In the first quarter, profits of Chinese industrial companies increased 12.1 percent from a year earlier, 5.1 percentage points slower than in the first two months, National Bureau of Statistics data showed.
Economists at Nomura projected China's economic growth to fall to 7.5, 7.4 and 7.2 percent in the next three quarters.
The official Purchasing Managers' Index, a comprehensive gauge of operating conditions in state-owned industrial companies, fell to 50.6 last month from March's 50.9, according to the China Federation of Logistics and Purchasing.
A reading above 50 means expansion but, although the index has been above that level for the seventh consecutive month indicating continued growth in manufacturing, analysts said the growth momentum was not as strong as expected.
"China's economic recovery was fragile," said Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd. "The official PMI appeared to be lower than expected, and its component indexes pointed to insufficient demand at both home and abroad."
The component indexes showed that new orders cut 0.6 points from a month earlier to 51.7 in April, new export orders lost 2.3 points to 48.6, while input prices slumped 10.5 points to 40.1 - all signs of weakening demand.
Zhang Liqun, an economist at the State Council's development research center, also said the PMI's dip in April indicated the foundation of China's economic recovery was not solid.
"The sharp loss in input prices was a reflection of weakening confidence among manufacturers," Zhang said. "All these showed the possibility for China's growth to slow slightly in the future. We must work to stabilize domestic demand and make our economic recovery more sustainable."
The HSBC China Manufacturing PMI, slanted toward private and export-oriented manufacturing companies, is released today. A preliminary reading showed the index retreating to 51.1 in April, compared with March's 53.
China's gross domestic product expanded 7.7 percent in the first three months, slowing from 7.9 percent in 2012's final quarter.
The weaker-than-expected economic growth has triggered calls for 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.
In the first quarter, profits of Chinese industrial companies increased 12.1 percent from a year earlier, 5.1 percentage points slower than in the first two months, National Bureau of Statistics data showed.
Economists at Nomura projected China's economic growth to fall to 7.5, 7.4 and 7.2 percent in the next three quarters.
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