Official data released today, Sunday, shows that manufacturing activity in China "unexpectedly contracted" in April, exacerbating the challenges facing the economy amid an uneven post-COVID recovery, a slowdown in global demand, and ongoing fluctuations in the country’s real estate sector.
Data from the National Bureau of Statistics indicates that the official Purchasing Managers' Index (PMI) for the manufacturing sector dropped to 49.2, down from 51.9 in March, falling below the 50-point threshold that separates expansion from contraction on a monthly basis.
This figure was below expectations, which were set at 51.4. Additionally, data showed that non-manufacturing activity in China grew "at a slower pace" in April, presenting a negative signal for policymakers who are relying on service consumption to offset weakness in the manufacturing sector amid declining global demand.
The National Bureau of Statistics reported that the official PMI for the non-manufacturing sector recorded 56.4 compared to 58.2 in March, remaining above the 50-point mark that differentiates growth from contraction on a monthly basis.
The official composite PMI, which includes both manufacturing and services, stood at 54.4 compared to 57 in March. The world’s second-largest economy had grown faster than expected in the first quarter of the year, driven by a release of consumer demand following the easing of COVID-19-related restrictions, but factory production has slowed amid weak global growth.
