As China closed its metaphorical economic doors due to the recent surge of Covid cases its manufacturing activity has hit the lows. Statistically, the activity has hit its lowest level since February 2020. The PMI, a key gauge of manufacturing activity, came in at 47.4 during the month of April. "Decline in production and demand." authorities said as the below 50 mark separates growth from concentration.

Beijing digs in on its zero-Covid policy that involves stamping out clusters as they emerge through targeted lockdowns and mass testing but the policy could be the driving force in the manufacturing slowdown. In Shanghai, the city’s 25 Million residents have been largely confined to their homes for the past month. Authorities are showing signs of loosening some of the restrictions which may be in the best interest to ease the economic choke occurring in China.

The Covid resurgence has backed-up supply chains along with the lack of truckers. Goods have piled up at the world’s busiest container port as well. National Bureau of Statistics senior statistician Zhao Qinghe acknowledged that some enterprises have had to reduce or stop production, while many firms have reported an increase in transportation difficulties.

"The production and operation of ... enterprises have been greatly affected.”

Zhao said

Earlier today, Caixin released its own PMI showing a second straight month of drop off with the figure dropping from 48.1 to 46.0. The Caixin survey is seen as a more accurate reflection of China’s situation than the official government figures. "Covid-19 control measures have done a number on logistics," said Caixin Insight Group’s Wang Zhe in a statement