China’s factory activity dipped in April on weak demand as bumpy post-Covid economic recovery continues

Caixin/S&P Global manufacturing purchasing managers’ index (PMI) fell to 49.5 last month, down slightly from 50 in March

Reading echoes a similarly disappointing official manufacturing PMI, which fell to 49.2 in April from 51.9 in March

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China’s Caixin/S&P Global manufacturing purchasing managers’ index (PMI) fell to 49.5 last month, down from 50 in March, data released on Tuesday showed. Photo: EPA-EFE/WU HAO

Published: 9:59am, 4 May 2023Updated: 10:49am, 4 May 2023

China’s factory activity unexpectedly dipped in April, a private sector survey showed on Thursday, due to softer domestic demand and suggesting the manufacturing sector is losing momentum amid a bumpy post-coronavirus economic recovery.

The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) fell to 49.5 in April from 50 the previous month prior.

The reading missed expectations of 50.3 in a Reuters poll and marked the first contraction since January when the “exit wave” from zero-Covid policies hit production lines. The 50-point index mark separates growth from contraction on a monthly basis.

The reading echoes a similarly disappointing official PMI released on Sunday and reflects the uneven nature of China’s economic recovery, with services consumption, a key growth driver in the first quarter, outperforming manufacturing.

This suggests that China’s economic recovery significantly slowed after Covid-19 infections peaked at the start of this year

Wang Zhe

Along with a subdued property market and a deep slump in industrial profits, analysts said the economy faces continued headwinds.

“This suggests that China’s economic recovery significantly slowed after Covid-19 infections peaked at the start of this year,” said Wang Zhe, economist at Caixin Insight Group.