Home > Chemical News

Chemical News

China's manufacturing growth slows in April on policy tightening

https://www.chemnet.com   May 03,2011 ICIS
SHANGHAI-China's manufacturing growth eased in April as the government's measures to tighten monetary policy started to show signs of helping to slow domestic demand, industry sources said on Tuesday.

The Purchasing Managers' Index (PMI) declined by 0.5 percentage points from March to 52.9% in April, according to a report from the China Federation of Logistics and Purchasing (CFLP) released on 1 May. The PMI fell after rebounding in March from three consecutive months of slowdowns.

The index for new orders fell by 1.4 percentage points month on month to 53.8% in April, with the import order index at 50.6%, a fall of 1.4 percentage points. The export index was 51.3%, a slide of 1.2 percentage points, according to data from CFLP.

The production index was 55.3% in April, a fall of 0.4 percentage points month on month, while the purchasing index dropped by 2.1 percentage points to 66.2%, according to the data.

A reading above 50 indicates the sector is expanding while a reading below 50 indicates contraction.

HSBC last week released its own index for China at 51.8% in April, unchanged from the previous month.

"We saw a slower consumption and export growth from last three month's PMI data in the first quarter, and the data in April also showed the same trend as the export index was softer, which means export growth may still slow down," said Zhang Liqun, an analyst from CFLP.

"The PMI decline in April figure indicated that China's economic growth is slowing down as the government's tightening monetary measures are taking effect," said Peking First Advisory chief economist Dong Xian'an.

However, April's PMI shows that China's economy has been expanding for 26 consecutive months. China's growth is being moderated amid a "soft landing", economist Dong said.

China has raised interest rates four times since last October and has hiked the reserve requirement ratio ten times since early 2010.

China's GDP expanded by 9.7% year on year in the first quarter of this year, slowing further from the 9.8% growth recorded in the fourth quarter of 2010.

 Print  |    add to Favorites  |    Close