China manufacturing activity grows at slower pace in April

China’s manufacturing activity expanded for a second month in April amid improved overseas demand, but the rate of expansion weakened amid higher production costs, official data showed on Tuesday.

China’s April manufacturing purchasing manager’s index (PMI) moderated to 50.4 in April from 50.8 in March, but remained in expansion territory, indicating that the recovery of industrial activity will continue into the second quarter, data from to the National Bureau of Statistics (NBS) showed.

A PMI reading above 50 indicates expansion in the manufacturing economy, while a lower number denotes contraction.

The production subindex rose to 52.9 in April from 52.2 in March, hitting a 13-month high, while both new orders and new export orders remained in expansion, indicating that the demand recovery seen in March “was not just a blip”, Dutch banking and financial services firm ING said in a note.

“Though economic activities continued to expand, more manufacturers are facing higher costs,” said senior NBS statistician Zhao Qinghe.

“The new order index and new export order index for industries including automobiles and electrical machinery and equipment are both above 53, indicating domestic and foreign market demand in related industries has increased.”

The employment sub-index was little changed but remained in contraction for the 14th consecutive month, as there continues to be a mismatch between hiring demand and the labor supply, it said.

Separately, a joint private-sector survey conducted by Chinese media group Caixin and S&P Global of Chinese manufacturers rose to 51.4 in April from 51.1 in March, marking the sixth successive monthly improvement, with growth the most pronounced in 14 months.