Malaysian manufacturing conditions deteriorate further in April

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China's Purchasing Managers' Index (PMI) stood at 51.4 percent in April, slightly down from 51.5 percent in March, said the National Bureau of Statistics (NBS) on Monday. The pace of expansion was unchanged in Austria and improved in both France and Ireland.

United Kingdom manufacturing sector fell to 17-month low of 53.9 compared to forecast of 56.5.

"While temporary factors make it hard to gauge underlying momentum, the recovery from March's low point is somewhat underwhelming and provides an indication that the construction sector has been treading water at the very best in recent months". New business rose for the sixth consecutive month.

That said, the rate of growth eased to the weakest pace since November, 2017, reflecting the slowest gain in new export orders since November.

"All in all, Markit's manufacturing survey provides more evidence that the economy has fundamentally slowed this year, strengthening the case even more for the MPC to hold back from raising interest rates later this month", Samuel Tombs, economist at consultancy Pantheon Macroeconomics, said.

However, the report showed that demand in the sector remained subdued, and new work increased only marginally, although employment numbers rose for the 21st month in a row. Aashna Dodhia, economist at IHS Markit and author of the report, said.

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She noted that the recent build-up of inflationary pressures faced by manufacturers softened in April, with input cost inflation broadly in line with the historical average.

But the economy remains strong and price pressures showed some signs of increasing last month, so the European Central Bank is still likely to move away from its ultra-easy monetary policy this year. Optimism reflected expectations that new business and demand conditions will improve over the coming 12 months, according to panellists.

The world's third-largest economy has grown for eight straight quarters through the end of 2017, the longest continuous expansion since the 1980s bubble economy.

"Although growth has slowed markedly compared to the start of the year, December had seen the best performance in over 20 years of survey data collection, with factory activity clearly surging at an unsustainable rate".

The expansion was supported by higher inventory and employment levels.

"Uncertainty has also intensified due to worries regarding trade wars and Brexit, underscoring downside risks to the outlook", he added.

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