2023-05-04 12:41:53
© Reuters. Factory in Hangzhou, China 04/30/2020. China Daily via REUTERS
By Ellen Zhang and Ryan Woo
BEIJING (Reuters) – China’s manufacturing activity unexpectedly contracted in April as falling orders and weak domestic demand dragged down the manufacturing sector, a private survey showed on Thursday, putting the economic outlook for the second quarter at risk.
The Caixin/S&P Global Purchasing Managers’ Index (PMI) for Chinese manufacturing fell to 49.5 in April from 50.0 in March. The 50 mark separates growth from contraction monthly.
The reading was below the 50.3 expectation in a Reuters poll and marked the first contraction since January, when the end of the Covid-zero policy led to a wave of infections across China and briefly hit production lines.
The survey echoes the equally disappointing official PMI released on Sunday and reflects the unevenness of China’s economic recovery, with the services sector so far outpacing manufacturing and helping the world’s second-largest economy grow a robust 4.5% in the first quarter in compared to the previous year.
“The latest survey readings are consistent with growth still brisk at the start of the second quarter, but momentum is fading from what was achieved in the first quarter,” said Julian Evans-Pritchard, head of China economics at Capital Economics.
Output growth slowed for the second straight month in April as weaker-than-expected new orders reduced output, Caixin’s private survey showed.
New orders shrank for the first time in three months, although new export orders returned to growth after contracting in March.
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