China factory output growth slows

Output in China’s factories and mines continued to expand in April but at a slower pace than in the previous month.

The purchasing manager’s index (PMI) was 51.2 in April, the National Bureau of Statistics (NBS) said, down from a near five-year high of 51.8 in March.

A figure above 50 shows growth in the sector, a key driver of wider growth in the world’s second biggest economy.

The first quarter of 2017 has seen an acceleration in China’s GDP growth as well as a rebound in retail spending.

Robust trade data has also helped ease concerns about the strength of the economy following last year’s slowdown.

“Although the PMI has dropped slightly, we can also see the steady accumulation of positive factors,” NBS analyst Zhao Qinghe said in a statement.

Mr Zhao also highlighted increased production of consumer goods and improvements in small business activity as positive signs for the economy.

However analysts said growth may slow in the second quarter.

“The still-high output and new orders sub-indices suggest growth momentum likely remained resilient in April, albeit slower than in a strong March,” Zhao Yang of Nomura said in a note.

“Looking ahead, we see downside pressures looming and maintain our call for a shallow slowdown through the course of this year.”

Betty Wang of ANZ Research wrote in a note that the April data “suggests that China’s manufacturing activity might have retreated from its peak” in the first quarter.

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