Manufacturing produces small increase in April

Manufacturing growth experienced a small increase in April while new export orders fell sharply, official data showed on Thursday.

The world's second-largest economy still faces heavy downward pressure, although second-quarter growth is showing signs of recovery, analysts warned.

The purchasing managers index for the manufacturing sector rose to 50.4 in April, indicating a slight expansion, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

Feb manufacturing PMI drops to 50.2

HSBC flash PMI sinks to a 7-month low

The reading was 50.3 a month ago. The index began to climb in March after a three-month decline.

"Slowly expanding domestic demand is fueling the increase of the PMI," said Zhao Qinghe, an analyst at the NBS. The raw material procurement index also hit a three-month high.

But the contracting new export orders sub-index in the PMI is signaling that Chinese factories face sluggish exports ahead. Its April reading slumped one point to 49.1. Exports from China shrank 3.4 percent year-on-year in the first quarter, data from the General Administration of Customs show.

"China's economic growth remains weak because of slowdowns in the export, property and employment sectors. The country is hungry for fresh government policies to regain the upswing momentum," said a Bank of China report released on Monday.

On Wednesday, Premier Li Keqiang pledged to support the trade sector in a bid to stimulate the cooling economy.

Li stressed "arduous efforts" will be needed to meet the annual growth target of 7.5 percent for 2014.

Previous growth-spurring measures are showing positive effects in April and if the weakening in the property sector does not worsen, economic growth is on track to speed up, said the Bank of China.

Steady growth of PMI in the following months is very likely because of favorable policies, according to Zhang Jing, an analyst with Nanjing-based broker Huatai Securities.

"The so-so economic performance was just an acceptable start for the second quarter. The economy is set to face strong challenges in the second half of this year," Zhang warned.

The April PMI released by HSBC Holdings less than a week ago was posing an even more pessimistic economic outlook, reporting a fourth straight monthly decline.

The Ministry of Industry and Information Technology said the profitability of local factories increased during the first three months of this year.

"The government has been trying to optimize the nation's industrial structure while keeping a steady overall production growth," said the ministry.

But the remarks could not deliver enough evidence of recovery to the market. Mounting finished goods inventories still bother manufacturers, said a Huatai Securities report.