China's economic growth to wane in 2021 due to slowing demand of sectors, say analysts
May 02, 2021
Beijing [China], May 2 : China's economic growth may have 'peaked', but the momentum will only wane for the remainder of the year after slowing domestic and overseas demand led to lower-than-expected sentiment in the manufacturing and non-manufacturing sectors in April, say analysts.
The official manufacturing purchasing managers' indices (PMI) in China fell to 51.1 in April from 51.9 in March, South China Morning Post (SCMP) reported citing data released by the National Bureau of Statistics (NBS) on Friday. The result was below expected.
Meanwhile, the official non-manufacturing PMI - which measures morale in the services and construction sectors - fell to 54.9 in April from 56.3 in March, which was also below expected.
"The latest surveys suggest that growth edged down this month. Supply-side disruptions appear mostly to blame for a slower rise in manufacturing output. But there are also signs of a demand-led slowdown in construction and services. Activity is still robust and is likely to remain so in the near-term, but sequential growth will probably continue to cool," said Julian Evans-Pritchard, senior China economist at Capital Economics.
He further said that demand for Chinese consumer goods is likely to fall back over the coming quarters as vaccine roll-outs allow global consumption patterns to return closer to normal.
Liang Zhonghua, chief macro analyst at Haitong Securities, said that data showed that China's economic growth momentum has turned back to a downward trajectory after short term disruptions.
The weakening of economic data also suggests Beijing will slow its moves to curb economic stimulus, at least for now, SCMP quoted Lu Ting, the chief China economist at investment bank Nomura.
Within the official non-manufacturing index, service sector sentiment fell to 54.4 in April from 55.2 in March, while construction sector morale fell to 57.4 from 62.3. The employment also fell to 48.7 in April from 49.7 in March.
"Surveyed companies said that the problems such as chip shortage, clogged international logistics, a container shortage and rising freight rates were still serious," said senior NBS statistician Zhao Qinghe.
