China's manufacturing industry may experience a sixth consecutive contraction in April but at a slower pace, thanks to the government's earlier easing measures, HSBC Holdings Plc said on Monday.
The HSBC Flash Purchasing Managers Index (PMI), a preliminary indicator of the operating conditions in the domestic manufacturing sector, increased to 49.1 in April from 48.3 in March, showing a rebound of real economic activity, a report from the bank said.

The HSBC prediction is based on the monthly replies to questionnaires for more than 420 manufacturing companies' purchasing executives. A reading below 50 means contraction, while that above 50 indicates expansion.

Qu Hongbin, chief economist in China with HSBC, said: "This suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown."

According to the report, the sub-indices that respectively showed manufacturing output, new export orders and employment were all under the 50 boundary value. In consequence, there may be a need for more easing policies in the coming months to boost economic growth, said Qu.

"We expect monetary and fiscal easing to speed up in the second quarter," he said.