- Qu Hongbin, economist at HSBC
A preliminary reading of China's manufacturing sector's performance showed a further decline in activity in April, which fell to the lowest level in 12 months, adding to signs Beijing's efforts to cushion a slowdown are yet to help the nation's factories. The Markit HSBC Flash PMI declined to 49.2 in April down from 49.6 a month earlier, with a reading below the crucial 50-mark threshold indicating a contraction of the sector's business activity. The gauge remained in contractionary territory due to sluggish domestic demand and flagging exports. Moreover, there were stronger deflationary pressures in the sector, with both input and output prices declining at faster rates. Manufacturers also reported job shedding for the 18th consecutive month. However, increasing new export orders in April appeared to be a bright spot. The preliminary PMI figure is based on 85% to 90% available data and is released about one week before the final PMI reading.
The weak PMI reading followed China's gross domestic product data, which showed the nation's economic output expanded at 7% from the previous year in the first quarter, while some economists expect that Beijing might not be able to meet its goal of about 7% growth for the full year. Industrial output growth slowed in March to the lowest level since 2008, while exports plunged 15% from a year earlier.
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