Factory activity in China contracted more sharply in April, as widespread closures imposed to combat “Covid-19” halted industrial production and disrupted supply chains, raising fears of a sharp economic slowdown in the second quarter that will affect global growth. .
The National Bureau of Statistics said Saturday that the official Purchasing Managers’ Index for the manufacturing sector fell to 47.4 points in April from 49.5 in March, contraction for the second month in a row. This is the lowest level since February 2020.
A Archyde.com poll had expected the Purchasing Managers’ Index to fall to 48 points, well below the 50-point mark that separates contraction from growth on a monthly basis.
The PMI reading, along with a sharper decline in services, provides the first indications of the performance of an economy wracked by the expansion of anti-Covid-19 restrictions, such as the extended shutdown of the Shanghai mall. It is believed that dozens of major Chinese cities are in full or partial lockdown due to the strict anti-coronavirus policy.
With hundreds of millions stuck at home, consumption is taking a hit, prompting more analysts to cut growth forecasts for the world’s second-largest economy.
The production sub-index fell to 44.4 points in April from 49.5 the previous month, while new orders fell to 42.6 from 48.8 in March. (Archyde.com)