China factory activity contracts in April - Caixin PMI

Chinese factory activity slipped in April, according to survey data released on Thursday.

The China Caixin manufacturing purchasing managers index, which covers smaller and export-oriented businesses compared to the official PMI, fell to 49.5 from 50 in March, pointing to a contraction in factory output for the first time since January, Caixin and S&P Global said.

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

“It remains to be seen if the rebound is sustainable after a short-term release of pent-up demand.”

The report said domestic demand was the “main drag” on the April survey, while the job market also deteriorated, Wang added that “as market demand remained subdued, businesses trying to slash costs were reluctant to hire more workers, with some even announcing layoffs”.

Reporting by Frank Prenesti for Sharecast.com