China, one of the world’s power houses, has not done much better than Germany, as measured by its Purchasing Managers’ Index (PMI). The fact that both stumbled reinforces the notion that the economy of the entire world has slowed down. Data from Japan has not been strong recently. That leaves the United States as the only country that might be relatively healthy.
The China PMI data from Markit showed:
The HSBC Manufacturing PMI fell from 51.6 in March to 50.5 in April, according to the flash estimate produced by Markit, only a shade higher than February’s four-month low of 50.4. The above-50 reading means manufacturing conditions have now improved for six successive months but that the rate of expansion at the start of the second quarter slowed to near-stagnation.
With the April PMI coming in below the first quarter average of 51.5, the latest survey raises the possibility that growth in the manufacturing-dominated Chinese economy slowed further from the disappointing 7.7% annual rate of GDP expansion seen in the first quarter.
The weakness of the PMI also points to the possibility of a further slowdown in industrial production, after disappointing official data showed output growing at an annual rate of just 8.9% in March. While such a rate would be envied by developed economies, the rate of growth was the weakest seen since May 2009.
The April survey showed output and new orders growing at slower rates than in March and during the first quarter as a whole.