BEIJING—Readings of Chinese factory and service-sector activity worsened dramatically in April, falling to their lowest levels since the early days of the Covid-19 outbreak, as recent lockdowns in dozens of cities across the country shut factories and pummeled consumer spending.
China’s National Bureau of Statistics said Saturday that its official manufacturing purchasing managers index dropped to 47.4 in April, from 49.5 in March, falling to its lowest level since February 2020. The result fell short of the median forecast of 48.0 among economists polled by The Wall Street Journal, and well below the 50 mark that separates expansion from contraction.
The subindex of factory production plummeted to 44.4 in April from 48.8 in March, the statistics bureau said. The sharp decline came as factories reduced or halted production due to the spreading virus, said
Zhao Qinghe,
a senior official at the statistics bureau.
The rapid deterioration in the manufacturing reading offers a first glimpse into the stark economic cost of China’s zero-tolerance approach to the Omicron variant of the coronavirus, which put the entire northeastern province of Jilin and dozens of cities—including Shanghai, a bustling financial hub of 25 million residents—under weeks of lockdown. Most of the harshest measures were imposed in late March.
Worried about the highly transmissible variant and seeking to avoid a Shanghai-style hard lockdown, many other regional governments across the country pre-emptively curtailed people’s movements after detecting just a few infections, crushing economic activity.
Even regions with no Covid cases have been seriously affected by the current wave of concern spreading across the country. Apart from the closure of factories inside locked-down regions, trucks have been stranded on the road as local authorities bar outside traffic, snarling logistics…
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