China’s manufacturing activity in April is expected to have slowed down, according to a Reuters poll of economists. The official purchasing managers’ index (PMI) likely slipped to 50.3 in April from 50.8 in March, indicating a loss of momentum in the country’s factory sector at the start of the second quarter.
Despite faster-than-expected growth in the first quarter, March indicators showed that domestic demand remains weak. The ongoing property downturn is also impacting local governments’ finances and household confidence, analysts say.
High-frequency indicators like steel demand showed muted growth in April, adding to concerns about the manufacturing sector. The private Caixin factory survey is also expected to show a slowdown in the manufacturing PMI for April.
Investors are anticipating more stimulus measures from Chinese authorities to support the economy. The upcoming April Politburo meeting is expected to focus on economic affairs, with analysts noting that policymakers may not rush to implement further easing measures given the better-than-expected first-quarter GDP growth.
However, with the U.S. Federal Reserve and other developed economies holding off on interest rate cuts and trade tensions escalating between the West and China, Beijing may face challenges in boosting external demand and navigating geopolitical uncertainties that could impact its economic recovery.
Overall, the data release by the National Bureau of Statistics on Tuesday will provide more insights into the state of China’s manufacturing sector and the potential challenges ahead for the world’s second-largest economy.