China's factory activities slow, expectations unabated
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E-mail Xinhua, May 1, 2023
China's factory activities slowed in April as the foundation for economic recovery has not yet been consolidated, but analysts say expectations for further economic expansion remain unabated.
The purchasing managers' index (PMI) for China's manufacturing sector came in at 49.2 in April, down from 51.9 in March, data from the National Bureau of Statistics (NBS) showed Sunday.
A reading above 50 indicates expansion, while a reading below 50 reflects contraction.
The April reading was affected by insufficient market demand and a high base in the first quarter, the bureau's senior statistician Zhao Qinghe said.
Despite the decline, analysts noted that sub-indexes continue to show positive signs, and the economy's growth momentum continues.
Production in the manufacturing sector maintained its expansion, with the sub-index standing at 50.2, according to the NBS.
In April, affected by the declining prices of bulk commodities on the international market, the sub-index measuring purchase prices of major raw materials decreased by 4.5 percentage points from the previous month to 46.4, said Wen Tao, an analyst at the China Logistics Information Center.
A survey conducted by the center and the NBS showed that 43 percent of enterprises consider the costs of raw materials to be high, down 4.2 percentage points from the previous month.
The index measuring supplier delivery times maintained its expansion for three consecutive months, indicating that logistics efficiency has improved and providing a solid foundation for the easing of supply shocks, Wen said.
Market sentiment in the manufacturing sector remains stable as the sub-reading for business expectations stood at 54.7, according to the NBS.
The purchasing managers' index for China's non-manufacturing sector came in at 56.4 in April, down from 58.2 in March, but still remains in expansion.
The recovery of the services sector was consolidated, Zhao said, noting that the sub-index for business activities climbed to 55.1, increasing by 15.1 percentage points from the same period last year.
The sub-index for new orders in the services sector stood at 56.4 as demand continued to be unleashed, and the sub-index measuring expectations for business activities came in at 62.3, revealing strong enterprise confidence.
The sub-index for the construction sector was 63.9 this month, and companies in the industry remain confident about the future of the market.
China's composite PMI stood at 54.4 in April, signaling that overall production from manufacturing and non-manufacturing enterprises continues to expand, Zhao said.
The decline of PMI indexes in April is temporary during economic recovery, said Zhang Liqun, a researcher at the Development Research Center of the State Council, calling for more efforts to ensure the full implementation of existing policies.
China's economy is still recovering, with yet-to-be-strengthened impetus, insufficient demand and new headwinds in the country's economic transformation and upgrading, according to a key meeting of China's top decision-makers on Friday. The meeting also noted that there remain many difficulties and challenges in the country's pursuit of high-quality development.
The meeting urged efforts to accelerate the construction of a modern industrial system underpinned by the real economy, consolidate the foundation of self-reliance and strength in science and technology, boost the confidence of business entities, and help companies recover strength for development.
China will roll out practical and effective measures based on in-depth research to maintain sound growth momentum, and it will promote the sustained and overall improvement of economic operations, said Meng Wei, spokesperson for the National Development and Reform Commission.
