China’s factory activity falls at fastest pace in a year, survey suggests
Signs of worsening slowdown in manufacturing prompt calls for more support from policymakers, as flash PMI turns negative again
Factory activity on the mainland contracted at its fastest pace in a year in April, a private survey showed, suggesting that economic conditions are still deteriorating despite increasingly aggressive policy easing by the central bank.
The flash HSBC/Markit Purchasing Managers' Index (PMI) fell to 49.2 in April, below the 50-point level that separates growth in activity from a contraction on a monthly basis.
After a brief rebound in February, the index has now been back in negative territory for two consecutive months. Economists had forecast a reading of 49.6, equal to March's final reading.
"The growth momentum remains weak in April, which calls for further policy easing," said Zhao Yang, chief China economist at Nomura in Hong Kong.
"The next step might be a cut in interest rates and I expect they will do that this quarter."
The sharp decline in employment in March moderated and export orders rose for the first time in three months, but most of the news was bad.
New orders declined further to a one-year low of 49.2 from March's 49.8, pointing to softer domestic demand.