Bloomberg: China’s economy is slowing rapidly

China’s economic activity shrank sharply in April as the lockout in Shanghai and other parts of the country to curb a widespread Covid-19 epidemic shut down factories, blocked roads and prevented people from consuming, escalating concerns about in global supply chains, according to Bloomberg.

The recession was widespread in April, with factory output shrinking further and demand for services far lower than expected. Procurement ratios are the first official figures for April and show the extent of the damage to the economy due to the epidemic and the policies of the Covid Zero government.

Factory activity fell to its lowest level in more than two years, with the official manufacturing PMI falling to 47.4 from 49.5 in March, according to data released by the National Statistics Office on Saturday. This was largely in line with the average estimate of economists.

The non-manufacturing index, which measures activity in the construction and services sectors, fell to 41.9 from 48.4 in March, the lowest level since February 2020 and well below the consensus forecast of 46. A measure above 50 indicates expansion, while anything below 50 indicates contraction.

The deterioration in manufacturing activities was due to a sharper decline in both production and demand, the statistical office said in a statement. The latest Covid epidemics, which have hit many parts of the country, have forced some companies to cut or even stop production.

Services in the services sector fell sharply “due to the severe impact of the epidemics,” Zhao Qinghe, senior NBS statistician, said in a statement. Business shrank in 19 of the 21 areas of research, including aviation, accommodation and catering, he said.

The data showed that new orders received in April declined faster, indicating weaker domestic demand, while new orders for exports also slipped sharply.