China’s manufacturing sector grew slower than expected in April, according to data released on Tuesday.
The Caixin/Markit factory Purchasing Managers’ Index for April was 50.2, missing the 51 projected by analysts in a Reuters poll. The reading for March was 50.8.
The private PMI survey came after China’s National Bureau of Statistics released official manufacturing PMI for April, which came in at 50.1. Analysts polled by Reuters had expected the indicator to stay at 50.5 as in the previous month.
PMI readings above 50 indicate expansion, while those below that signal contraction.
The Australian dollar dipped by around 0.2% against the U.S. dollar following the release of both PMI data, reversing earlier gains. The Australian dollar is often seen as an investment proxy for Chinese economic prospects. China is Australia’s largest trading partner, according to the from the Department of Foreign Affairs and Trade in Australia.
Tommy Xie, head of Greater China research at Singaporean bank OCBC, said the “slightly softer” official PMI data can be attributed to a build-up in inventories in the previous month.
“Overall, above 50 is still a decent number,” Xie told CNBC’s “Street Signs”before the release of the Caixin/Markit data.
The PMI is a survey of businesses about the operating environment. Such data offer a first glimpse into what’s happening in an economy, as they are usually among the first major economic indicators released each month.
For China, the PMI is among economic indicators that investors globally watch closely for signs of trouble amid domestic headwinds and the ongoing U.S.-China trade negotiations.
Articles and pictures by CNBC