On the other hand, the employment index rose to 49.2 in April from 48.1 in March, but the reading below 50 continues to indicate a contraction. The growth, albeit slow at a six month low, can be attributed to the sustainability of the new export business according to the report filed by Markit. There were divergences with regards to stock levels, with holdings of finished goods continuing to fall while pre-production inventories rose again. Month of April also saw the input cost inflation accelerating as the prices stiffened for metals, chemicals, plastics and paper.
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The Institute for Supply Management (ISM) said on Monday its index of national factory activity slipped to 50.8 last month from a reading of 51.8 in March.
It also noted that “relatively weak market conditions and muted client demand contributed to a further solid decline in staff numbers”.
The group’s gauge of new bookings expanded slightly less in April than a month earlier, and an index of backlogs managed to grow for a second straight month for the first time since the end of 2014.
New projects and the injection of funds meant China’s growth was not tumbling, they said, but the recovery was relying on policy stimulus.
While production expanded modestly and at almost the same pace as in March, growth in domestic and export orders faded slightly, albeit remaining in positive territory.
There was a mixed picture, with manufacturing growth strong in Italy and Spain last month while Germany showed signs of reviving.
A jobs report Friday from the Labor Department is projected to show employment in all industries held up in April. However, the rate of expansion was only slight and softened since March.
Like the government’s official reading before it, the Caixin-Markit China manufacturing purchasing manager’s index (PMI) for April has come in below expectations, casting further doubt on the sustainability of the industrial sector rebound seen in March.
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The pace of growth in both domestic and foreign orders dwindled, pushing firms to reduce output.
