Growth in China’s manufacturing sector dipped in April as new export orders decreased, according to a preliminary survey of purchasing managers.
The flash HSBC Purchasing Managers’ Index fell to 50.5 in April from 51.6 in March but was still stronger than February’s reading of 50.4.
A sub-index measuring new export orders fell to 48.6 in April from 50.5 in March, reflecting weaker global demand as the US economic recovery remains fragile and the euro zone is mired in recession.
The latest data may overshadow China’s recovery in the second quarter after growth unexpectedly slowed to 7.7% in the first quarter from 7.9% in the previous three months.
“The HSBC Flash China Manufacturing PMI came in at a two-month low, but still managed to expand modestly in April, albeit at a much slower pace," says Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC. "However, new export orders contracted after a temporary rebound in March, suggesting external demand for China’s exporters remains weak."
Weaker overall demand has also started to weigh on employment in the manufacturing sector.
Meanwhile, Beijing is expected to respond strongly to sustain the economic recovery by increasing efforts to boost domestic investment and consumption in the coming months.