China’s factory activity slows in April

China’s factory activity slowed in April, hit by reduced overseas demand, supply bottleneck and rising costs, official data released on Friday showed.

China’s manufacturing Purchasing Managers’ Index dropped to 51.1 in April from 51.9 in March and missed the forecast at 51.7, though it remained above the 50 threshold which separates growth from contraction.

On the other side, the separate private-sector survey (Caixin manufacturing PMI), also released on Friday, showed factory activity expanded in April at the fastest pace in four months, rising to 51.9 from 50.6 in March and well above 50.8 forecast, although businesses also reported a sharp surge in input costs.

The economic recovery accelerated sharply in the first quarter this year with record growth of 18.3%, recovering fully from last year’s pandemic-induced slump and expectations that the world’s second largest economy would grow 8.6% this year.

Fast recovery brought the economy above its pre-virus trend and less supportive policy stance would cause growth momentum to start fading that would slow the activity and bring the economic growth back to pre-crisis pace.

Chinese policymakers have signaled they would avoid sudden policy changes that could derail the recovery, as the outlook remains bright after COVID-19 pandemic is brought under control in major markets that is expected to boost overseas demand and keep the economic recovery on course.