China’s factory activity skidded in April due to weak demand, a private sector survey showed on Thursday. The data suggest that the manufacturing sector is losing momentum amid a bumpy post-COVID economic recovery. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 50.4 in April from 51.9 in March, missing analysts expectations of 52 and marking its weakest reading since October 2020 when it was at 49.7 points before the coronavirus pandemic hit China hard last year.
The sub-index for new orders dropped significantly as domestic demand weakened while export orders rose slightly but were still below pre-pandemic levels due to lingering global uncertainty and uneven vaccine rollouts worldwide, which have weighed on international trade activities and curbed Chinese exports growth potentials this year compared with 2020 when shipments surged by double digits despite virus disruptions elsewhere around the world.
Meanwhile, employment continued to expand albeit at a slower pace than seen over recent months as firms remain cautious about their hiring plans given an uncertain outlook for business operations going forward while input costs increased further but output prices declined marginally, suggesting that manufacturers are unable or unwilling pass higher raw material costs onto consumers during these challenging times ahead of us all.
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