Coronavirus: China manufacturing mood steadied in April but fears of overseas collapse heightened

China’s official manufacturing purchasing managers’ index (PMI) was 50.8 for April, slightly worse than analysts’ expectations

Figure represents a steadying in mood but factory owners expect a severe export slump due to coronavirus containment abroad

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China’s manufacturing PMI was 50.8 in April, showing some signs of stability in the industrial economy. Photo: Xinhua

Published: 9:07am, 30 Apr 2020Updated: 10:58am, 30 Apr 2020

China’s manufacturing economy stabilised further in April, as the country slowly inched closer to full capacity following the coronavirus lockdown, but serious concerns about overseas demand lingered.

The official manufacturing purchasing managers’ index (PMI) stood at 50.8 for the month, with a reading above 50 signifying growth in activity in this survey of factory operators.

This followed a reading of 52.0 in March, which showed some stabilisation in activity after the worst reading on record in February. April’s figure was slightly below the median result of a survey of economists conducted by Bloomberg, which had predicted 51.0.

However, the new export orders subindex of the manufacturing PMI was 33.5, down from 46.4 in March, signifying the anxiety in China about the negative global economic picture.

The non-manufacturing PMI, a gauge of sentiment in the services and construction sectors, was 53.2 last month, compared to 52.3 in March and an all-time low of 29.6 in February. This reading was better than the Bloomberg analysts’ forecast of 52.5.

Within the non-manufacturing survey, a key engine of growth appeared to be the construction sector, where the subindex rose to 59.7, an increase of 4.6 points on March. This is likely to be in anticipation of fiscal stimulus from the government, which is under pressure to intervene to stabilise the economy and the jobs market.

There was also a modest improvement in the services sector, while across the non-manufacturing economy, business expectations rose to 60.1 from 57.