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An independent survey of China’s manufacturing sector indicates business activity grew at the slowest pace since September last month as sluggish demand dragged on production, putting the country’s factories on uncertain footing at the start of the second quarter.
The Caixin-Markit manufacturing purchasing managers’ index dropped to 50.3 in April, a seven-month low that put it substantially closer to the 50-point line separating growth from contraction compared to a reading of 51.2 in March, as well as further beneath the level reported by China’s official manufacturing gauge.
Manufacturers surveyed last month for the independent survey reported markedly slower growth in both output and new orders, with consumer goods output keeping overall production from falling further on declines from intermediate and investment goods.
Growth in new export orders also fell to a marginal level – and the weakest reading since the current four-month growth streak began – thanks to contraction in demand for capital goods.
A sub-index for employment marked its 42nd consecutive month of contraction, with the pace of jobs shedding accelerating to the fastest pace since January. Inflation also slowed sharply, with growth in output prices rising at the slowest pace in eight months as input prices grew at the slowest pace in seven months.
The Caixin gauge, which focuses primarily on smaller, private manufacturers, came in markedly below the April reading of 51.2 from the official manufacturing PMI produced by the National Bureau of Statistics. The latter chiefly tracks larger state-owned companies, suggesting the latest fallback in growth is centred in the private sector.
The latest Caixin reading also makes for a spread between the two gauges of 0.9 in favour of the official gauge, marking the widest spread between the two since June 2016.