• Job shedding noticed in manufacturing after November
• Input prices decrease at sharpest pace since September
BEIJING - Manufacturing growth in China grow at a weaker pace in April as new export orders fell for the first time this year, and job shedding was noticed after November, a private survey showed Thursday, suggesting the euro zone recession and sluggish US demand may be continuing to pose risk.
The final monthly HSBC Purchasing Managers' Index (PMI) for April dropped to 50.4 in April from 51.6 in March and was largely in line with a flash reading of 50.5 last week.
Fifty divides expansion from contraction on a monthly basis.
"April data signaled only a slight improvement of operating conditions in the Chinese manufacturing sector, as output and new orders both expanded at weaker rates. New export orders contracted for the first time in 2013 so far," the HSBC-Markit report stated.
On the price front, input prices decreased at the sharpest pace since last September, while output charges declined at the quickest rate for eight months.
What is worrying is that job shedding was also recorded in the manufacturing sector, the first time a net fall in payroll numbers has been recorded since last November.
HSBC's Chief China Economist, Qu Hongbin said, "The slower growth of manufacturing activities in April confirmed a fragile growth recovery of the Chinese economy as external demand deteriorated and renewed destocking pressures built up.
HSBC's Chief China Economist, Qu Hongbin said, "The slower growth of manufacturing activities in April confirmed a fragile growth recovery of the Chinese economy as external demand deteriorated and renewed destocking pressures built up. The looming deflationary pressures also suggest softer overall demand conditions.
"All this is likely to weigh on the labour market, which is likely to invite more policy responses in the coming months."
The report was in tune with China's official PMI of 50.6 in April from an 11-month high of 50.9 in March as new export orders fell.
The China Federation of Logistics and Purchasing (CFLP) in its report released Wednesday pointed out that for the seventh consecutive month the PMI figure has stayed above 50 per cent.
Although the PMI remains generally stable, the slight retreat indicates slower growth in the manufacturing sector and the need for a stronger momentum in China's economic growth, the CFLP stated.
The April PMI showed that the foundation for China's economic recovery is not solid enough, said Zhang Liqun, an analyst from the Development Research Center of the State Council, or China's cabinet, reported Xinhua.
The decline in orders caused the fall in the inventory level, and a sharp drop in the sub-index for purchasing prices of raw materials suggests the corporate confidence was undermined, Zhang said.
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