China’s factory sector lost momentum in April, with growth slowing to its weakest pace in seven months as domestic and export demand faltered, a private survey showed on Tuesday.
The findings echoed those in official manufacturing and service sector data on Sunday, reinforcing views that China’s economic growth remains solid but is starting to moderate after a surprisingly strong start to the year. The Caixin PMI fell to 50.3 in April, missing economist forecasts’ of 51.0 and a significant decline from March’s 51.2.
Caixin PMI fell more than expected, but the market acts like if nothing bad happened. However, this may herald that a slowdown in China is on the cards. source: Bloomberg
Production growth and total new orders rose at the slowest pace since last September, with both showing only slight improvement from the previous month. Sharp falls in prices of iron ore, steel and other raw materials led to a sharp cooling in producer price inflation.
The official manufacturing PMI fell less sharply but still slid to a six-month low of 51.2 in April from March’s near five-year high of 51.8, according to data at the weekend. Analysts had expected a reading of 51.6.
Growth in China’s services sector slowed to 54.0 in April, from the previous month’s 55.1, but remained robust. Compared with the official PMI, the Caixin/Markit survey tends to focus more on small- and mid-sized manufacturers. Both reports, however, suggested that smaller firms are under more pressure than their larger, state-backed peers. Despite an awful miss, the AUD remains supported after the RBA interest rate decision.