What’s new: China’s manufacturing sector contracted in March for the first time this year due to factors such as weaker global demand and a high base of comparison in the rapid recovery of the first quarter.
The purchasing managers’ index (PMI) for manufacturing fell to 49.2 in April from 51.9 in March. It was the first time since December for the gauge to fall below 50, signaling contraction, according to data released April 3 by the National Bureau of Statistics. Subindexes for new orders, new export orders and manufacturing employment were all below 50.
An index of nonmanufacturing activity in services and construction slid to 56.4 from 58.2 in March, suggesting still-strong expansion in those sectors as consumer and government spending rose.
The background: The data suggest China’s recovery remains lopsided, with production lagging the rebound in consumption.
China’s GDP grew 4.5% year-on-year in the first quarter, beating expectations as consumption and industrial production picked up speed after the country scrapped Covid restrictions.
China’s top leadership set the growth target this year at “around 5%,” lower than many economists’ forecasts for economic expansion, which go as high as 5.8%.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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