China’s manufacturing activity at lowest level in 2 years

Shanghai, China, Apr 30 (EFE).- Chinese manufacturing activity fell in April to its lowest level since February 2020 due to restrictions prompted by the worst outbreaks of Covid-19 in two years.

Official data released on Saturday by the National Bureau of Statistics (NBS) showed purchasing managers’ index (PMI) for China’s manufacturing sector dropped by 2.1 percentage points to 47.4 in April – the lowest figure since February 2020.

It was 49.5 in March and 50.2 in February this year.

A mark above 50 points represents growth and below indicates contraction.

Private digital newspaper Caixin also found a significant drop from 48.1 points in March to 46 in April.

The NBS manufacturing data is lower than expected by analysts, who predicted that it would be around 48 units.

Senior NBS statistician Zhao Qinghe attributed the decline to the drop in the supply and demand and high costs of raw materials “due to the severe impact from the outbreaks” of Covid-19.

“Many enterprises reported increasing difficulties in logistics and transportation, as well as difficulties in the supply of major raw materials, poor sales of finished products, overstocking and so on,” Zhao said.

He said some companies even temporarily reduced or stopped production because of Covid-19 restrictions that also hit logistics flows.

The subindices, which measure production and demand, fell to 44.2 and 42.6 points.

The statistician highlighted the “high level” at which industrial prices fluctuated.

The NBS also published the PMI for the non-manufacturing sector, which measures activity in sectors like construction and services.

In April, it plummeted to 41.9 points from 48.4 in the previous month.

The business activity index of the service industry fell to 40.0, which is 6.7 percentage points lower than the previous month.

The NBS said 19 of the 21 surveyed industries were in the contraction range.

Among them, air transportation, accommodation, catering, ecological protection, and public facility management were still in the lower contraction range, said Zhao.

Wang Zhe, an economist at Caixin Insight Group, also spoke of lower foreign demand “due to the impact on logistics.”

Orders for exports fell to the lowest level since May 2020, said Wang.

However, Wang assured that the Chinese businesses remained optimistic. “They believe that the outbreaks will be controlled.”

But some of the respondents in the surveys were concerned that the restrictions lasted too long, Wang said. EFE