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Beijing - Chinese manufacturing improved in April but remained in contraction, British banking giant HSBC said on Monday, releasing data it said could temper fears of a slowdown in the world's No 2 economy.
HSBC's purchasing managers' index (PMI), which measures factory output, rose to 49.1 in April up from 48.3 in March, the banking group said in a statement.
A reading above 50 indicates expansion, while a reading below 50 suggests contraction.
HSBC's chief economist for China, Qu Hongbin, said the data suggested that government measures to spur the economy were showing signs of having an impact and "should ease concerns of a sharp growth slowdown".
"That said, the pace of both output and demand growth remains at a low level in an historical context and the job market is under pressure. This calls for additional easing measures in the coming months," Qu said.
The bank's data marks the sixth straight month that the reading remained in contraction.
HSBC's figures are typically more pessimistic than China's official numbers. The official data for April has not yet been released.
The HSBC survey puts more emphasis on smaller companies, which are suffering more in the economic downturn than state-owned giants.
The official Chinese government data released last month had shown manufacturing output rose to its highest level in a year in March, the fourth consecutive month that the official numbers indicated expansion.
China's economy is widely expected to slow this year as woes in key export markets such as Europe and the United States hit its overseas sales.
The government has set a target of 7.5% economic growth this year. China's economy grew 9.2% last year and 10.4% in 2010.
