The manufacturing purchasing managers’ index, which measures the level of activity, fell to 49.2 from 51.9 in March. A reading below 50 indicates contraction. Most economists didn’t see this coming and generally assumed the gauge would stay above 51.
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The slowdown in activity is likely not to be seen in isolation from weaker growth in the global economy, as inflation has risen everywhere and central banks are trying to prevent prices from rising as fast with rate hikes. But China is also plagued by a host of other crises, from a debt-laden real estate sector to declining consumer confidence and geopolitical tensions with the United States.
China’s economy grew 4.5% in the first quarter of this year compared to the same period last year. This was the strongest growth in a year and indicated a strong economic recovery since the release of the country’s tough crown policy.
Low growth target
However, data for March has already shown that Chinese industrial output has not progressed as fast as experts predicted. The Chinese government has set a 5% growth target for this year. This is the lowest level in decades, but Premier Li Qiang has already warned that it could be difficult to achieve this growth target.