Growth in China’s manufacturing sector slowed faster than expected in April as producer price inflation cooled.
Growth in China’s manufacturing sector slowed faster than expected in April, an official survey showed on Sunday, as producer price inflation cooled and policymakers‘ efforts to reduce financial risks in the economy weighed on demand.
The National Bureau of Statistics‘ official Purchasing Managers‘ Index (PMI) fell to a six-month low of 51.2 in April from March’s near five-year high of 51.8.
Analysts polled by Reuters had predicted a reading of 51.6, the ninth straight month above the 50-point mark that separates growth from contraction on a monthly basis.
Demand weakened across the board with the biggest decline in the input price sub-index, which fell to 51.8, its slowest expansion since June last year, from 59.3 in March.
Zhou Hao, an economist at Commerzbank in Singapore, said recent sharp declines in iron ore and onshore steel prices point to some of the pressures the country’s manufacturers are facing.
„We believe that this on one hand reflects that there is little improvement in underlying demand, “ Zhou wrote in a note.
„On the other hand, the de-leveraging effort by the Chinese authorities, has started to work.“
Chinese steel and iron ore futures tumbled to multi-month lows earlier this month as market sentiment turned bearish on demand outlook and worries mounted about a glut of steel later this year.
