China's official PMI rises to 13-month high in April

BEIJING (Reuters) - China's official purchasing managers' index (PMI) rose to a 13-month high in April, signaling the economy has found a footing and may be recovering from a first-quarter trough, but smaller factories are still struggling.

The pick-up in the PMI to 53.3 from 53.1 in March indicated a further expansion in the vast factory sector, although it was slightly below market expectations of 53.6. Readings above 50 signal expansion while those below 50 point to contraction.

The manufacturing output sub-index rose to 57.2 from 55.2 in March. However, the National Bureau of Statistics noted many important industries remained weak with index readings below 50, among them chemicals, equipment, autos and oil refining.

The improvement in manufacturing likely reflected restocking after a slow winter, said Ting Lu, an economist at Bank of America-Merrill Lynch.

He said infrastructure investment was recovering as the dust settled from a corruption scandal in the Ministry of Railroads and from bureaucratic reshuffling at the local government level.

Although new export orders edged up to 52.2 from 51.9 in March, the sub-index for all new orders slipped to 54.5 from 55.1, implying that domestic new orders remained weak.

SMALL FIRMS SQUEEZED

The PMI boosted Australian shares, but did little to move other markets where investors are concerned about a sluggish U.S. economy and the bubbling euro area debt crisis. Indeed, many markets, including those in China, are closed on Monday to mark public holidays.

Australian shares extended gains on the day to 0.5 percent after the PMI. The market had been up 0.2 percent before the figures were released.

Tight credit, especially for real estate developers and private firms, had helped push the Chinese economy to its weakest footing since the fall of 2008. But there are signs that the availability of loans is improving.

New loans in April may have reached 900 billion yuan ($140 billion), the Caijing Magazine said this weekend, citing a recent report by China International Capital Corp, or CICC. More attractive interest rates led to an acceleration in new mortgages, it added.

"Policymakers continue to grapple with the challenge of loosening enough to prevent a sharp slowdown, but not loosening too much and sparking an inflationary spiral," said Alastair Thornton, analyst at IHS Global Insight.

China's annual growth slowed to 8.1 percent in the first quarter of 2012 from 8.9 percent in the previous three months -- the fifth consecutive quarter of slowdown in the world's second-largest economy.

While large-scale manufacturers continue to report growth, small firms remain in contraction, the statistics bureau said. The tight credit conditions have disproportionately hit smaller and private companies, as reflected in a survey of smaller factories by HSBC.

The HSBC Flash PMI, the earliest indicator of China's industrial activity, showed a stabilizing economy last week. That index's reading of 49.1 for April came in below 50 for the sixth month in a row, reflecting a contraction in the factory sector, however the rate of deterioration slowed in a sign the economy may have bottomed out in the first quarter.

HSBC is due to release its final reading for April on Wednesday.

"Economic activity has started to recover but at a relatively slow pace," Capital Economics' analyst Qinwei Wang said in a note before the official data, citing an index of data the firm tracks.

(Editing by John Mair)

  • Nissan tests self-cleaning paint that could make car washes obsolete 46 minutes ago
    Nissan tests self-cleaning paint that could make car washes obsolete

    During this vile, never-ending winter, motorists had three options to keep their cars clean: Shell out on regular car washes; slave away in the cold, wind and snow washing it yourself, or screw it and just drive a dirty car. I, like many, chose the last option. But if only I'd been able to test Nissan's self-cleaning car, all my troubles would have washed away.

  • Popular hot yoga myths debunked 7 hours ago
    Popular hot yoga myths debunked

    What’s the hottest new workout taking the world by storm? That would be hot yoga, also known as Bikram yoga. Conducted in a heated room with sweltering temperatures of about 40°C (or approximately 104° Fahrenheit) and 40 per cent humidity, … Continue reading →

  • Thursday #sgroundup: Body found of boy who made first call from Korea ferry: report 8 hours ago
    Thursday #sgroundup: Body found of boy who made first call from Korea ferry: report

    Here are today’s top trending stories in case you missed them.

  • Photo of a very thin Lee Kuan Yew sparks concern
    Photo of a very thin Lee Kuan Yew sparks concern

    A new picture of Singapore's first prime minister, Lee Kuan Yew, who is now 90 years old, has drawn concern from people on Singapore's internet space.

  • Waste oil collector struggles after STOMP posts, receives help from kind souls
    Waste oil collector struggles after STOMP posts, receives help from kind souls

    After being photographed at work in Jurong pooling used oil near coffee shops, 50-year-old Valerie Sim has been struggling to keep her family afloat. Web portals STOMP and The Real Singapore published pictures of her in February, triggering a witch hunt for others like her and comments from readers like “Who knows if they’ll use it as cooking oil?” Some readers also said they filed police reports against her and other people they believed were doing the same thing she was.

  • I tendered my resignation without securing the next job. Here’s why I don’t mind.
    I tendered my resignation without securing the next job. Here’s why I don’t mind.

    I have committed a taboo – I have tendered my resignation without securing the next job. The reactions to the announcement were varied but they all pretty much hint at a deep sense of disapproval. “Why did you do that?” It was as if I had renounced my faith. “What are you going to do from now on?” Almost as though a misfortune had incapacitated me. “What does your family have to say about it?” As if I had offered to cook for the next family dinner. I was, and still am, certain of my reasons and motivations for the resignation. However the response I received got me thinking about why people are so concerned about the gaps in their careers. The developed world evolved from an agricultural economy to an industrial economy to the service age, then to the knowledge economy in the late 1990s and 2000s marked by breakthroughs in technological innovations and competition for innovation with new products and processes that develop from the research community. According to The Work Foundation, the knowledge economy is driven by the demand for higher value added goods and services created by more sophisticated, more discerning, and better educated consumers and ... The post I tendered my resignation without securing the next job. Here’s why I don’t mind. appeared first on Vulcan Post.