“China’s manufacturing may shrink for a sixth month in April, maintaining pressure on officials to adopt more policies to stimulate economic growth, a survey of companies showed.
The 49.1 preliminary reading of the purchasing managers’ index from HSBC Holdings Plc and Markit Economics today compares with a final 48.3 in March. A number below 50 points to a contraction.
The contraction, if confirmed in the final reading due May 2, would be the longest since the global financial crisis and may spur the government to lower banks’ reserve requirements a third time since November. A $430 billion expansion of the International Monetary Fund’s lending power in Washington talks ending yesterday may help contain Europe’s debt turmoil and shore up demand in China’s biggest export market.
“The numbers in recent months have never been that good but don’t show signs of falling off a cliff either,” Paul Cavey, a Hong Kong-based economist with Macquarie Securities Ltd., said of the HSBC PMI. “Today’s number would suggest continuation of the government’s current policy of slow, cautious loosening.”
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