China became the first major economy to reopen factories in March after the ruling Communist Party declared victory over the outbreak. But the United States, Europe and other major markets have yet to lift controls that are keeping consumers from spending.
A monthly purchasing managers’ index issued by business magazine Caixin slipped to 49.4 from March’s 50.1 on a 100-point scale on which scores below 50 indicate activity is contracting. A separate survey by the Chinese statistics bureau and an official industry group sank to 50.8 from the previous month’s 52.
The official survey’s sub-index for export orders plunged by 12.9 points to 33.5.
Both surveys showed employment weakening.
“It is still too early to conclude that the Chinese economy is growing again,” said Iris Pang of ING in a report.
Manufacturing activity contracted at its fastest pace on record in February after Beijing shut down much of the economy to fight the virus, which emerged in December in central China.
Activity rebounded in March but forecasters warn manufacturers might face a second dip due to a possible second wave of the outbreak, plunging global economic growth and a financial shock due to falling oil prices.
“There is still a lot of uncertainty in the coming months from weak global demand,” said Pang.