Factory activity in China contracted for the first time in three months in April, according to an independent index released on Thursday, underscoring that the post-Covid economic recovery is still showing some signs of weakness.
Declining demand is the main brake, with new orders falling in the domestic market.
The purchasing managers’ activity index (PMI) stood at 49.5 points last month, after 50 in March and 51.6 in February, Chinese media group Caixin said in a report. and S&P Global.
A number above 50 indicates an expansion of activity, and below a contraction.
“This suggests that China’s economic recovery has slowed significantly since the peak of Covid-19 cases earlier this year,” economist Wang Che said in a report to Caixin.
“We’ll have to see if it stabilizes again” in the coming months, he notes.
A wave of infections hit China in December-January after once-mandatory PCR testing, lockdowns and travel restrictions were abruptly ended. Since then, economic activity has gradually resumed, albeit with some shocks.
In terms of employment, the situation worsened in the manufacturing sector in April.
“As demand is weak, companies looking to cut costs are reluctant to hire more employees, and some have announced layoffs,” Wang Che said.
However, the survey showed that business confidence for the next 12 months remains high and reached its second highest level in two years in April.
Reported on Sunday, the Chinese government’s official PMI index stood at 49.2 points last month, up from 51.9 in March, confirming a contraction in manufacturing activity.
The Caixin survey, which mainly surveys SMEs, is considered to paint a more accurate picture of the economy, while the government statistic focuses on large public enterprises.
Chinese growth rose 4.5% year-on-year in the first quarter, its fastest pace in a year.
The increase is largely driven by household consumption, while the resumption of activity in factories and the real estate recovery have been slow to materialize for the time being.
This article was published automatically. Sources: ats / awp / afp
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