From Gina Lee
Investing.com – China's manufacturing activity picked up more slowly than expected in April, indicating that the economy is continuing to recover, but at a slower pace due to strong demand.
Earlier in the day, it said the April reading was 51.1, below the 51.7 in Investing.com's forecasts and below the 51.9 in March. That was 54.9 and thus also below the March value of 56.3. However, both stayed above the 50 mark, indicating growth.
In the private sector, the April reading was 51.9, above Investing.com's forecast (50.8) and 50.6 (March). Investors are now waiting for what is due in the following week.
The figures showed, "China's economy continued to recover steadily," but "some companies surveyed said issues such as chip shortages, poor international logistics, container shortages and rising freight rates are still serious," NBS economist Zhao Qinghe said in a note.
The note added that slowdowns in manufacturing supply and demand, as well as rising cost pressures, continue to be challenges.
Stronger consumer confidence is bolstering the service industry as the country lifted travel restrictions earlier in the year.
On the construction side, however, the outlook is more complicated as the government made it easier to sell debt to finance infrastructure projects. Fewer investment projects were also approved, which fell sharply in the first quarter compared to 2020. The real estate market is also facing stricter funding rules.
"The PMI for services has slowed more than the PMI for manufacturing due to deleveraging in the real estate sector, and it will continue to do so," Iris Pang, chief economist for Greater China at ING Bank NV in Hong Kong, told Bloomberg.
However, she predicted an upturn due to a five-day vacation from Saturday.
Elsewhere in Asia, the Japanese were up 2.2% in March, up 2.2% month-on-month, above the 2% growth in Investing.com forecasts and the 1.3% decline in February. As expected, the decline in April was down 0.2% year-on-year, but was below the 0.1% decline in March.
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