HSBC’s flash PMI (Purchase Manufacturing Index) showed improvement and increased to 49.1 in April compared with 48.3 in March.
However, the manufacturing reading still remains below 50 which is the benchmark used for showing contraction.
“If anything the pace of slowdown has been slowing” said Hongbin Qu, chief economist at HSBC, during an interview with Bloomberg. “It should help to ease concerns about a sharp slowdown in China in the market” Qu added.
Qu blamed the slightly disappointing manufacturing number for April on a deceleration of exports from the Euro zone along with investment weakness in China.
Analysts are expecting more monetary easing from China’s central bank to help contain an economic slowdown in the country. However, the latest manufacturing reading signals that earlier easing measures from Beijing are beginning to help the Chinese economy.
” This suggests that earlier easing measures from Beijing have started to work, and hence should ease concerns of a sharp growth slowdown” Quin said in a statement.