China's economic momentum dampened by sluggish April factory & services activity

Posted on May 3, 2024   |  

China observed a slowdown in both its manufacturing and services sectors during April, indicating a potential deceleration in economic growth.

This decline in activity, following a period of strong expansion in March, underscores the challenges posed by erratic demand and presents obstacles for policymakers.

According to the National Bureau of Statistics, the manufacturing purchasing managers' index (PMI) dropped from 50.8 in March to 50.4 in April.

Notably, there was sluggish growth in new export orders, accompanied by a continued decline in employment levels.

Similarly, the services sub-index of the NBS non-manufacturing survey exhibited slower growth, falling to 50.3 in April compared to 52.4 in March.

Investors anticipate further economic stimulus measures from Chinese authorities, with attention to insights from the monthly Politburo meeting.

China faces a prolonged period of subdued external demand amidst a global economic landscape where major economies such as the U.S. Federal Reserve show no inclination towards interest rate cuts, exacerbated by trade tensions and accusations of industrial overcapacity exports.