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Manufacturing in China expanded for the sixth consecutive month in April, but at a slower pace, according to the HSBC Purchasing Managers’ Index™. The headline figure of 50.4 was down from 51.6 in March. Production growth at manufacturing plants in China slowed in April while growth in new orders fell to a five-month low. New export orders declined for the first time since December with reports of weaker demand from the US, Asian and European markets.

The slower growth of manufacturing activities in April confirmed a fragile growth recovery of the Chinese economy

Qu Hongbin,
Chief Economist
for Greater China, HSBC

Qu Hongbin, Chief Economist for Greater China and Co-Head of Asian Economic Research at HSBC, said: “The slower growth of manufacturing activities in April confirmed a fragile growth recovery of the Chinese economy as external demand deteriorated and renewed destocking pressures built up. The looming deflationary pressures also suggest softer overall demand conditions. All this is likely to weigh on the labour market, which is likely to invite more policy responses in the coming months.”

Average input costs for manufacturers fell for the second successive month, the sharpest decline since September, with more than 12 per cent of respondents reporting a fall. The price of manufactured goods also decreased for the second month in a row, with the rate of discounting the fastest in eight months as companies tried to boost new business levels.

Employment levels fell on the previous month, representing the first recorded net fall in payroll numbers since November 2012. The drop in employment numbers was attributed to employees resigning or retiring and not being replaced.

PMIs™ are a monthly indicator of economic trends. The China survey is based on responses from purchasing executives in more than 420 manufacturing companies. Any figure above 50.0 signals expansion, while below 50.0 indicates contraction.

The intellectual property rights to the HSBC China Manufacturing PMI™ provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, HSBC use the above marks under license. Markit and the Markit logo are registered trade marks of Markit Group Limited.

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