China April official factory activity expands but at slower pace
Activity in China’s manufacturing sector expanded for the second month in a row in April but only marginally, an official survey showed on Sunday, raising doubts about the sustainability of a recent pick-up in the world’s second-largest economy.
The official Purchasing Managers’ Index (PMI) was 50.1 in April, easing from March’s 50.2 and barely above the 50-point mark that separates expansion in activity from contraction.
Analysts polled by Reuters had predicted the reading would improve to 50.4, after upbeat March data fueled hopes that the country’s prolonged economic slowdown was easing.
The findings were “a little bit disappointing”, Zhou Hao, senior emerging market economist at Commerzbank in Singapore, wrote in a note.
“To some extent, this hints that recent China enthusiasm has been a bit overpriced and the data improvement in March is short-lived.”
While production expanded modestly (52.2) and at nearly the same pace as in March, growth in domestic and export orders faded slightly, though remaining in positive territory.
In a sign of caution over the outlook, factories continued to draw down heavily on inventories of finished goods. Read more