China’s factory activity grew at a slower pace in April, with the Caixin Manufacturing Purchasing Managers’ Index (PMI) easing to 50.4, down from 51.1 in March and falling short of the 49.9 consensus forecast. The softer reading highlights the fragile nature of the country’s post-pandemic recovery and rising headwinds facing the industrial sector.
Although the figure remains above the 50-mark that separates expansion from contraction, the drop signals that momentum in China’s private manufacturing sector is losing steam, particularly amid weak external demand and soft domestic consumption. New export orders and production growth both moderated, according to the report.
The data follows recent indications from the official PMI that showed a mixed picture of the broader economy, with services activity staying resilient but manufacturing showing signs of fatigue. Analysts suggest that persistent property sector weakness and global trade uncertainty are key risks.
“The April PMI shows that while there is still growth, it’s fragile and uneven,” said a Beijing-based economist. “Policymakers may need to consider further stimulus if they want to maintain the pace of the recovery.”
In response, Chinese equity markets edged lower and the yuan remained under slight pressure as investors weighed the likelihood of additional policy support from Beijing to shore up confidence.
Markets now look to upcoming trade data and credit figures for deeper insights into the health of the world’s second-largest economy.
