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Apr 22, 11:08 PM EDT

Survey: China factory activity slips again to 1-year low

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HONG KONG (AP) -- China's manufacturing deteriorated again in April to its lowest point in a year, in a fresh sign that growth is faltering in the world's second biggest economy.

HSBC said Thursday that a preliminary version of its index based on a survey of factory purchasing managers fell to 49.2 in April from 49.6 in March. It said new business dropped for the second month amid weak demand.

The index uses a 100-point scale on which readings below 50 indicate contraction. Preliminary results are based on responses from 85-90 percent of 420 factories.

The latest numbers signal that policymakers in Beijing will face further pressure to prevent a sharper slowdown as China's economic growth sputters.

China's growth cooled in the first quarter to its slowest quarterly expansion since the global financial crisis six years ago. Growth eased to 7 percent for the January-March period, down from 7.3 percent in the previous quarter, according to figures released last week.

Policymakers have taken action to shore up growth even as Chinese leaders repeatedly affirm their commitment to a "new normal" of slower growth. The most recent such move came Sunday, when the central bank slashed the bank reserve requirement ratio by 1 percentage point to free up more money for lending.

The survey also found that factories shed jobs for the 18th month in a row. China's manufacturing industry employs many millions of workers and the country's communist leaders want to avoid significant job losses and unrest as they reorient the economy to slower, more self-sustaining growth based on domestic spending instead of trade and investment.

The final version of the index, compiled by Markit is due on May 4.

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