23 April 2012 05:20 [Source: ICIS news]
However, the PMI rose to a two-month high of 49.1 in April, compared with a final reading of 48.3 in March, the bank said in a statement.
A figure above 50 indicates an expansion, while a figure below 50 represents a contraction.
The sub-indices for both new export orders and output contracted in April, but the decrease was at a slower rate compared with March, it said.
"As April flash PMI ticked higher, this suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown," said Qu Hongbin, HSBC’s chief economist for China.
However, both output and demand growth remained at a slow pace and the country’s job market is still under pressure, Qu said.
“This calls for additional easing measures in the coming months," he said, adding that HSBC expects monetary and fiscal easing to speed up in the second quarter of 2012.
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