China's manufacturing sector hits its lowest level in April, with growth slowing to its weakest pace in seven months as domestic demand and exports faltered, the Caixin Purchasing Managers' Index (PMI) shows on Tuesday.
The survey results reflect the official manufacturing and service sector data released on Sunday, pointing out that China's economic growth remains solid but is starting to moderate, after a surprisingly strong start to the year.
The Caixin PMI fell to 50.3 in April, falling short of economists' forecasts of 51.0 and decreasing from 51.2 in March.
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The index still remained just above the 50.0 mark, which separates expansion from contraction on a monthly basis, showing growth at its slowest pace since September 2016.
China's slowdown in exports is the main reason behind the decline. The output index has slowed down for two consecutive months, and the total amount of new orders also showed a similar trend, slowing down to the lowest since September last year.
Although some manufacturers are seeing increased demand at home and abroad for new and innovative products, others still reflect relatively weak customer demand, leading to a slowdown in the growth of new orders.
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"Downward pressure on manufacturing gradually emerged in April, with all indicators weakening," Zhong Zhengsheng, Director of Macroeconomic Analysis at CEBM Group says.
The official manufacturing PMI fell less sharply but still slid to a six-month low of 51.2 in April from March's near five-year high of 51.8, according to data at the weekend.
The first three months of the year saw China's GDP growth increase to 6.9 percent, driven by a construction boom. Many analysts predict that even if growth does slow in the next few months, Beijing will still be on course to hit its annual target of about 6.5 percent.
Government measures aimed at cooling the overheated property and rising borrowing costs are expected to eventually curb real estate investment.
Although the Caixin PMI tends to focus more on small- and medium-sized manufacturers, compared with the official PMI, both reports suggested that smaller firms are under more pressure than their larger, state-backed peers.
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