The official manufacturing Purchasing Manager’s Index came in at 50.8 for the month of April, as compared to 52.0 in March, said China’s National Bureau of Statistics on Thursday.
Analysts polled by Reuters had expected official manufacturing PMI to come in at 51.0 in April.
PMI readings above 50 indicate expansion, while those below that level signal contraction.
In February, the official PMI hit a record low of 35.7 as China was hit by the coronavirus outbreak that first emerged from the city of Wuhan in central China. Large-scale lockdowns were implemented to slow the spread of the disease officially known as Covid-19, sending the world’s second-largest economy to a standstill.
In the first quarter of 2020, China’s GDP contracted by 6.8% from a year ago — the first decline since at least 1992, when official quarterly GDP records started.
But lockdowns in China have started to lift with people going back to work as the number of daily new Covid-19 cases fall.
Despite production coming back online, demand for Chinese products is now expected to be dented by a demand slump from the rest of the world due to the global spread of the coronavirus that has sparked concerns about a global recession.
Indeed, China’s National Bureau of Statistics said in its analysis of the PMI readings that the recovery in demand was weaker than the recovery in production, according to a CNBC translation of its Mandarin language release. This was particularly true in sectors like textiles and apparel manufacturing and chemical raw materials production.
The bureau also flagged heightened uncertainties in the export market with some factories reporting canceled orders.
“The spread of the epidemic has accelerated overseas and global economic activity has contracted sharply,” it said, adding that China’s foreign trade is now facing greater challenges.
Chinese authorities have rolled out measures to support the economy.
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