Factory operations in China shrank sharply in April as widespread closures imposed to combat “Govt-19” halted industrial production and disrupted supply chains.
The National Statistics Office said on Saturday that the index of official procurement managers for the manufacturing sector fell to 49.4 points in April from 49.5 in March, shrinking for the second month in a row. This is the lowest level since February 2020.
A Reuters poll procured managers’ index was expected to fall to 48 points, below the 50-point mark that separates the contraction from growth on a monthly basis.
The PMI reading, with a sharp decline in services, provides the first indications for the performance of the economy, which has been crippled by the expansion of anti-Govt-19 restrictions such as the Shanghai Mall extended shutdown. Dozens of major Chinese cities are believed to have been completely or partially locked down due to their strict anti-corona virus policy.
With hundreds of millions of people trapped at home, consumption is gaining momentum, prompting more analysts to lower growth forecasts for the world’s second-largest economy.
The manufacturing support index fell to 44.5 points in April from 49.5 in the previous month, while new orders fell to 42.6 from 48.8 in March. (Reuters)
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