Factory growth slows in April
BY 2013-05-08 20:20:47
Analysts warn momentum could weaken
Growth in China's manufacturing sector slowed in April, and analysts fear that could now weaken momentum in the country's overall economic recovery in the second quarter, adding pressure on policymakers to increase their efforts at stimulating domestic demand.
China's Purchasing Managers' Index of the manufacturing sector declined to 50.6 last month from 50.9 in March, against 50.1 in February, said the National Bureau of Statistics and China Federation of Logistics and Purchasing.
The official PMI has now remained above 50 for seven consecutive months, indicating expansion in factory production. Any reading below 50 means contraction.
Zhang Liqun, an analyst from the Development Research Center of the State Council, or China's cabinet, said the latest PMI reading is still within a stable range.
But he added the weakened growth trend may suggest a possible slight slowdown in the overall economy, and measures should be taken to stabilize the domestic market, and ensure a sustainable rebound.
He said the expectations of manufacturing enterprises had started to turn pessimistic as purchase prices of raw materials had continued to drop sharply.
Industrial company profits also increased slower during the first three months, to 12.1 percent from a year earlier, compared with 17.2 percent from January to February, the NBS said.
April's PMI for small enterprises, meanwhile, retreated to 47.6 from 49.3 in March, the 13th consecutive month it has been lower than 50. It was 51 for large companies, down from 51.4. The figure was 50.7 for medium-sized companies, up from 50.3.
According to the NBS figures, six of 21 manufacturing industries showed contraction in April, including petroleum processing and coking, farm and sideline food processing, as well as the black metal smelting and rolling processing industries.