China manufacturing gauge at 12-month low

An index of China's manufacturing activity fell to a 12-month low in April, HSBC said Thursday, indicating further weakness as growth sputters in the world's second-largest economy.

The British bank's preliminary purchasing managers' index (PMI) came in at 49.2, it said in a statement, below the breakeven point of 50 and the 49.6 final reading in March.

The index reached 50.7 in February but has now shown contraction in four of the past five months. The reading was also below the median estimate of 49.6 in a Bloomberg News survey.

The index, compiled by information services provider Markit, tracks activity in China's factories and workshops and is regarded as a barometer of the health of the Asian economic giant.

A figure above 50 points to growth, but anything below indicates contraction.

China's gross domestic product (GDP) growth slowed to 7.0 percent in the first quarter from 7.3 percent in the final three months of last year, the worst result in six years.

That came after GDP expanded 7.4 percent in 2014, the slowest rate on an annual basic since 1990.

Markit economist Annabel Fiddes said the manufacturing sector continued to be plagued by tepid demand, falling prices and a decrease in employment.

"Relatively weak demand conditions were also highlighted by stronger deflationary pressures in the sector, with both input and output prices falling at faster rates. Meanwhile, job shedding across manufacturing firms was recorded for the 18th month in a row."

Citing a bright spot, however, Fiddes said overseas demand improved with export demand rising for the first time in three months.

HSBC said the final PMI data will be announced on May 4.

The government's official PMI earlier this month showed manufacturing activity expanding in March for the first time in 2015, coming in at 50.1.