Service sector weakens as growth stays stable
Print Edition
CHINA’S manufacturing activity grew for the second consecutive month in April, while the service sector weakened.
The official Purchasing Managers’ Index, a comprehensive gauge of operating conditions in large industrial companies, landed at 50.1 last month, the same as March and up from February’s 49.9, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.
A reading above 50 indicates expansion and the April figure was the highest since December.
However, the non-manufacturing PMI dropped 0.3 points to 53.4.
Bureau analyst Zhao Qinghe said the mixed performance suggested uncertainties in the economy but there were positive signs for a long-awaited stabilization.
“The industrial production has returned to normal after the Chinese New Year holiday,” Zhao said. “The recent enhanced easing efforts have helped to bolster the growth.”
The component indexes showed that production increased for the second month to 52.6, up from March’s 52.1, while input prices rose 2.8 points to 47.8. New orders were the same as in March at 50.2.
Zhou Hao, an economist at Australia & New Zealand Banking Group Co Ltd, said continued expansion of the official PMI indicated that growth momentum was picking up, though modestly, thanks to new projects and monetary policy easing.
“But the economy still faces strong headwinds and the risk of deflation has not diminished,” Zhou said. “The authorities will need to continue to roll out easing measures in the coming months.”
China’s economic growth slowed to 7 percent in the first three months, the weakest quarterly expansion in six years, prompting the central bank to take policy-easing actions that included cuts in the reserve requirement ratio and interest rates.
China’s private and export-oriented manufacturing sector may have deteriorated in April with a similar survey falling to a one-year low.
The HSBC Flash China Manufacturing Purchasing Managers’ Index, the earliest available indicator of the conditions at private and export-oriented companies, dropped to 49.2 in April from the final reading of 49.6 in March.
But profits at the factory end did improve.
Figures showed that net earnings of China’s industrial companies dropped 0.4 percent from a year earlier in March, better than the fall of 4.2 percent in the first two months, according to the National Bureau of Statistics.
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