The pace of Chinese factory activity dipped in April, prompting renewed concerns about the health of the world’s second-largest economy.
The government’s purchasing managers’ index fell to 50.1 in April from 50.2 in March, below economists’ forecasts of 50.4. The data, released yesterday, showed factory activity only just ahead of the break-even point of 50 that separates expansion from contraction.
The findings were “a little bit disappointing”, Zhou Hao, a Singapore-based economist for Commerzbank, said. “To some extent, this hints that recent China enthusiasm has been a bit overpriced and the data improvement in March is shortlived.”
China’s services industry also stayed in positive territory, but it grew at a slower pace. The non-manufacturing PMI slipped to 53.5 in April, from 53.8 in March. Services have been outperforming manufacturing as Beijing seeks to shift from heavy industry.
Expansion of manufacturing was supported by increased spending and a recovering housing market, according to Zhao Qinghe, an economist at the statistics bureau that released the figures. Mr Zhao also said that a decline in factory investment would rein in further expansion of production.
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First-quarter GDP growth of 6.7 per cent met expectations but remained far below the level that had made the country a key driver of global growth over the past quarter of a century.