Results of a private survey, the Caixin/Markit manufacturing Purchasing Manager’s Index (PMI), for April was 49.4 — in contractionary territory. Analysts polled by Reuters had expected the Caixin/Markit manufacturing PMI to come in at 50.3, compared with 50.1 in March.
Meanwhile, China’s National Bureau of Statistics said manufacturing activity in the country expanded slightly, reporting official manufacturing PMI of 50.8 for the month of April, as compared to 52.0 in March. Analysts polled by Reuters had expected official manufacturing PMI to come in at 51.0 in April.
PMI readings above 50 indicate expansion, while those below that level signal contraction.
In the first quarter of 2020, China’s GDP contracted by 6.8% from a year ago — the first decline since at least 1992, when official quarterly GDP records started.
Lockdowns in China have started to lift with people going back to work as the number of daily new Covid-19 cases fall. But demand for Chinese products is now expected to slump after the coronavirus spread to the rest of the world, sparking concerns about a global recession.
China’s National Bureau of Statistics said in its analysis of the PMI readings that the recovery in demand was weaker than the recovery in production, according to a CNBC translation of its Mandarin language release. This was particularly true in sectors like textiles and apparel manufacturing and chemical raw materials production.
The bureau also flagged heightened uncertainties in the export market with some factories reporting canceled orders.
Slowing global demand due to coronavirus hits China’s manufacturing sector in April, two sets of data show, CNBC, Apr 30