A cargo vessel is under construction in Qingdao Beihai Shipbuilding Heavy Industry Co Ltd in Qingdao, Shandong province. The preliminary HSBC PMI reading for manufacturing was 48.3 in April, compared with 48.0 in March. Yu Fangping / For China Daily

PMI reading indicates further contraction, but pace of decline slows: HSBC

Factory activity in China weakened for a fourth straight month in April, although the rate of decline eased, HSBC Holdings Plc said on Wednesday as it released its monthly Purchasing Managers' Index.

The preliminary reading was 48.3, compared with 48.0 in March. A reading below 50 indicates a contraction.

"The PMI reading in April shows growth stabilizing at a low level," the bank said.

Manufacturing under lingering pressure

Feb manufacturing PMI drops to 50.2

Domestic demand improved slightly, as suggested by an increase in new orders. The sub-index reading rose to 47.7 in April from 46.5 in March. Output rebounded to 48.0 from 47.2.

Contraction in new export orders and employment will probably continue to exert downward pressure on growth, the bank said.

The average HSBC PMI during the first quarter was 48.7, compared with 51.4 a year earlier.

Separately, the Ministry of Industry and Information Technology announced on Wednesday that industrial enterprises' profitability improved in the first quarter despite slowing production growth.

"The fundamentals of the country's industrial development are good," said Zhang Feng, a ministry spokesman. "The industrial structure is being optimized, although overall production grew slowly in the first quarter," said Zhang.

Industrial profits rose 9.4 percent year-on-year in the first quarter, compared with 12.2 percent for all of 2013, he added.

Zhang said the government will continue to push for capacity reduction in the five most troubled sectors where production facilities are concerned: steel, cement, electrolytic aluminum, plate glass and shipbuilding.

According to the National Bureau of Statistics, industrial output expanded 8.7 percent year-on-year in the first quarter, a five-year low. The rate was 9.5 percent in the same period of 2013.