CHINA’S MARCH PMI FALLS TO 51.2
First official indicator for Q2 shows expansion may be decelerating after recording 6.9pc in first quarter
CHINA’S official factory and services gauges pulled back from multi-year highs, dimming the outlook for the sustainability of the past two quarters’ acceleration in economic growth.
Manufacturing purchasing managers index (PMI) fell to 51.2 last month, from an almost five-year high of 51.8 in March, missing the median estimate of 51.7 in a Bloomberg survey and falling short of all projections.
Non-manufacturing PMI dropped to a six-month low of 54, from 55.1 in March. Gauges still showed momentum, as numbers higher than 50 indicated improving conditions.
The first official economic indicator for the second quarter signalled the expansion may be poised to decelerate this year after unexpectedly picking up to 6.9 per cent in the first quarter, the first back-to-back acceleration in two years.
The factory and services gauges remained at relatively robust levels, but last month’s data showed broad-based weakening across employment, output, new orders and export orders.
While analysts have upgraded their forecasts for growth this year, according to a recent Bloomberg survey, tighter property curbs introduced in major cities and a higher base of producer prices than last year are likely to weigh on output in coming months.
Top officials have also signalled they would introduce stricter regulatory measures to curb financial risk.
“The weakness is across the board and points to slowing growth momentum,” wrote Zhou Hao, an economist at Commerzbank AG in Singapore, in a note.
“This on one hand reflects that there is little improvement in underlying demand; on the other hand, the de-leveraging effort by the Chinese authorities has started to work. In general, China is in the course of monetary tightening and regulation strengthening.” Bloomberg