OREANDA-NEWS. April 26, 2013. China's manufacturing activity lost some of its dynamism in April, a new survey from HSBC has indicated, adding to concerns about the recovery of the world's second-largest economy.
 
The HSBC Flash China Manufacturing Purchasing Managers' Index (PMI) slowed to a two-month low of 50.5 in April, according to figures released by HSBC on Tuesday.
 
The bank's preliminary reading for April faltered from March's final index of 51.6.
 
The manufacturing output index also weakened to a two-month low of 51.1, compared with 53.0 in March. A reading above 50 suggests expansion, while a reading below 50 indicates contraction.
 
Sub-indexes on new export orders and employment dipped into the contraction field in April, while backlogs of work and stocks of finished goods both increased in the month, according to the HSBC survey.
 
For the manufacturing sector, input and output prices both fell at faster rates in April, along with slower growth in new orders and quantity of purchase in the month.
 
"New export orders contracted after a temporary rebound in March, suggesting external demand for China's exporters remains weak," said Hongbin Qu, chief economist for HSBC China. "Weaker overall demand has also started to weigh on employment in the manufacturing sector."
 
The chief economist said he expected Chinese policymakers to "respond strongly" to sustain the economic recovery by increasing efforts to boost domestic investment and consumption in the coming months.
 
HSBC's preliminary reading on manufacturing was based on data the bank collected from 85 to 90 percent of the 420 manufacturing companies it surveyed this month and it will publish its final April data on May 2.
 
The National Bureau of Statistics and the China Federation of Logistics and Purchasing are due to release official PMI data for April on May 1. The official PMI data is based on a survey of purchasing managers in more than 820 companies and 20 industries.