Econintersect: China’s HSBC PMI (purchasing managers’ index) preliminary (flash) reading for April came in below expectations at 50.5. This was down from the March reading of 51.6 and very nearly the same as February (50.4). The HSBC PMI is particularly sensitive to exports and that had a big impact with the sub-index measuring new export orders falling to 48.6. The 50 level is the demarcation between contraction and expansion.
Click on table for larger image.
Bloomberg reported that copper, other commodities and Asian stocks declined after the announcement. Bloomberg quoted Wang Na, an analyst at Guolian Futures Co:
“Economic data again fell short of estimates, hitting the stock market and metals. Now all eyes will be on the official PMI data to be released on May 1.”
Reuters had a quote from HSBC’s chief economist for China, Qu Hongbin:
“New export orders contracted after a temporary rebound in March, suggesting external demand for China’s exporters remains weak. Beijing is expected to respond strongly to sustain the economic recovery by increasing efforts to boost domestic investment and consumption in the coming months.”
Here are the graphics from Markit:
Here is the text of the press release from Markit:
Operating conditions improve marginally in April
Key points
- Flash China Manufacturing PMI™ at 50.5 (51.6 in March). Two-month low.
- Flash China Manufacturing Output Index at 51.1 (53.0 in March). Two-month low.
Data collected 12–19 April 2013.
The HSBC Flash China Manufacturing Purchasing Managers’ Index™ (PMI™) is published on a monthly basis approximately one week before final PMI data are released, making the HSBC PMI the earliest available indicator of manufacturing sector operating conditions in China. The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data.
Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said:
“The HSBC Flash China Manufacturing PMI came in at a two-month low, but still managed to expand modestly in April, albeit at a much slower pace. However, new export orders contracted after a temporary rebound in March, suggesting external demand for China’s exporters remains weak. Weaker overall demand has also started to weigh on employment in the manufacturing sector. Beijing is expected to respond strongly to sustain the economic recovery by increasing efforts to boost domestic investment and consumption in the coming months.”
Sources:
- HSBC Purchasing Managers’ Index™ Press Release (Markit, 23 2013)
- Copper Drops for Third Day as China Flash PMI Trails Estimates (Helen Sun, Bloomberg News, 22 April 2013)
- China HSBC Flash PMI falls, points to tepid second-quarter recovery (Kevin Yao, Reuters, 23 April 2013)
