Chinese manufacturing expanded in April but growth might be slowing after a rebound from the coronavirus pandemic, two surveys revealed on Friday.
A monthly purchasing managers' index issued by the business magazine Caixin rose to 51.9 on a 100-point scale from March's 11-month low of 50.6 on a 100-point scale on which numbers above 100 show activity expanding.
A separate survey released by the Chinese statistics agency and an industry group declined by 0.8 points to 51.1 but still was above the 50-point mark showing activity growing. A sub-index of production fell 1.7 points to 52.2, PTI said.
That suggests “growth momentum will wane this year,” Julians Evans-Pritchard of Capital Economics said in a report.
Chinese manufacturing and consumer spending have rebounded to above pre-pandemic levels, but the recovery is slowing. Economic growth in the first three months of 2021 slowed to 0.6 percent over the previous quarter.
The sub-index for new export orders in the April survey by the statistics bureau and the China Federation of Logistics & Purchasing declined 0.8 points to 50.4.
That might “reflect a delayed response to the COVID recovery in the US and in Europe,” Iris Pang of ING said in a report. “We should see some improvements in export orders as COVID continues to subside in these major export markets.”
Chinese manufacturers benefited from the relatively early reopening of the economy in 2020, while exporters got a boost from global demand for masks and other medical supplies. Exporters have gained global market share while foreign competitors still face anti-disease restrictions on business.
“The key remaining prop is the export sector but demand for Chinese consumer goods is likely to fall back over the coming quarters as vaccine rollouts allow global consumption patterns to return closer to normal," Evans-Pritchard said.
Some Chinese producers such as telecom equipment giant Huawei Technologies also are hampered by US curbs on access to processor chips and other technology.