China Caixin PMI stabilises in April, but economists cautious
Perhaps the most widely-followed gauge of factory sector conditions in China edged higher last month, pointing to stable conditions in Asia's largest economy over the near-term, economists said.
Nevertheless, those same economists pointed to details in Wednesday's report "hinting" at a slowdown that might be lying just around the corner.
Caixin's manufacturing sector Purchasing Managers' Index steadied in April, rising from March's print of 51.0 to stand at 51.1, after retreating from a reading of 51.6 in February.
Yet regulatory pressures, tightened credit conditions and a slowdown in economic growth overseas would likely all combine to weigh on China's factory sector, even if current trade tensions eased, said Capital Economics's Julian Evans-Pritchard.
Evans-Pritchard also pointed to a "sharp decline" in the subindex for new export orders and a rise in inventories to back up his arguments.
Furthemore, activity over the last few months had been supported by the easing of "particularly stringent" winter pollution controls, but, like growth in some foreign economies, that tailwind was now likely also past its peak strength, he said.
"The stability of the Caixin PMI last month suggests there is little immediate cause for concern over the health of China's economy. That said, we do expevct growth to start slowing again before long."