Manufacturing index rises fractionally but shows fourth straight month of contraction

By Wang Yanlin | May 5, 2014, Monday |

Online Edition

CHINA'S manufacturing activity in private and export-oriented firms ticked up slightly in April, a survey showed this morning.

The HSBC Purchasing Managers' Index, which measures operating conditions in largely private and export-oriented industrial companies, registered at 48.1 last month, better than 48 in March but lower than the flash reading of 48.3 released earlier, according to HSBC Holdings plc and research firm Markit.

A reading below 50 means contraction, and the latest data signaled the fourth successive monthly deterioration in the sector.

Qu Hongbin, chief economist for China at HSBC, said the data implied that domestic demand decreased at a slower pace, but remained sluggish, while new export orders and employment both contracted.

"The manufacturing sector, and the broader economy as a whole, continues to lose momentum," Qu said. "We think bolder actions will be required to ensure the economy regains its growth."

Over the past month, the State Council unveiled a set of measures, including lower reserve requirements for rural banks and speeding up railway construction, to support growth and employment after first-quarter gross domestic product growth eased to 7.4 percent, the slowest in 18 months.

The official PMI, unveiled last Thursday, rose to 50.4 in April from March's 50.3, said the China Federation of Logistics and Purchasing. The official PMI is weighted toward state-owned manufacturers.

Economy

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Manufacturing index rises fractionally but shows fourth straight month of contraction

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