China’s factory activity contracted at its fastest pace in a year in April, a private survey showed, suggesting that economic conditions are still deteriorating despite increasingly aggressive policy easing by the central bank. The flash HSBC/Markit Purchasing Managers’ Index (PMI) fell to 49.2 in April, below the 50-point level that separates growth in activity from a contraction on a monthly basis.
After a brief rebound in February, the index has now been back in negative territory for two consecutive months. Economists polled by Reuters had forecast a reading of 49.6, equal to March’s final reading.
The sharp decline in employment witnessed in March moderated somewhat and export orders rose for the first time in three months, but most of the news was bad. New orders declined further to a one-year low of 49.2 from March’s 49.8, pointing to softer domestic demand.