Business conditions continue to deteriorate in China

HONG KONG - Business conditions in China continued to deteriorate in April, with output and new orders contracting at slower rates, staff numbers being cut for a sixth month in a row, and a solid reduction in both input and output prices, according to the HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI).

 HSBC says Chinese manufacturers signalled a further deterioration in overall operating conditions during April. Fewer new orders led firms to cut their staffing levels at a modest pace, while purchasing activity fell for the third successive month. Meanwhile, both input costs and output charges fell markedly.
Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said the latest data implied that domestic demand contracted at a slower pace, but remained sluggish, suggesting that China’s manufacturing sector and the broader economy as a whole continue to lose momentum. “Over the past few days, Beijing has introduced more reform measures which could support growth by inducing more private sector investment. We think bolder actions will be required,” he said. www.hsbc.com (ATI).