An indicator of China's manufacturing performance declined in April, confirming a fragile recovery of the economy, final results of a survey by Markit Economics and HSBC revealed Thursday.
The purchasing managers' index, that measures the level of activity in the manufacturing sector, fell to 50.4 in April from 51.6 in March. The index pointed to modest slowdown in activity.
The reading was slightly below the preliminary score of 50.5. Nonetheless, the PMI has now posted above the 50 no-change mark for six successive months. Readings above 50 indicates expansion of the sector.
The official PMI survey released on Wednesday also signaled a slowdown in manufacturing sector, led by weaker growth in new orders and production.
"The slower growth of manufacturing activities in April confirmed a fragile growth recovery of the Chinese economy as external demand deteriorated and renewed destocking pressures built up," HSBC chief economist Hongbin Qu said.
Production at manufacturing plants in China increased for the sixth month in a row, though growth slowed to a marginal pace, Markit said. Growth in new orders eased to a five-month low, while new export orders declined for the first time since December last year.
The average input costs in the factory sector fell for a second successive month and at the sharpest pace since September last year. Output charges also decreased for the second month in a row, with the rate of discounting the fastest in eight months.
Hongbin said that the looming deflationary pressures also suggested softer overall demand conditions. "All this is likely to weigh on the labour market, which is likely to invite more policy responses in the coming months," the economist added.
The survey found that manufacturers reduced their staff levels marginally in April, which was the first reduction since November last year.
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