China May PMI slips to 53.9%, industries expand for 15th month

01 June 2010 06:51  [Source: ICIS news]

SHANGHAI (ICIS news)--)--Chinese industries have remained on an expansion mode for the past 15 straight months, although May’s purchasing managers’ index (PMI) slipped 1.8 percentage points to 53.9% from April due to weaker export orders, the China Federation of Logistics & Purchasing  (CFLP) said on Tuesday.

Export order index for the month was down 0.7 percentage point from April to 53.8%.

“The index in April was stable with that of March, but there was a drop in May. There are still many uncertain factors in the export sector,” said an analyst at the CFLP.

Meanwhile, the purchasing price index for May declined 13.7 percentage points, falling below 60% for the first time since November 2009, to 58.9%, due to weak commodity prices, the analyst said.

New order index declined 4.5 percentage points to 54.8%, while production index eased 0.9 percentage point to 58.2%, according to CFLP data.

The PMI serves as a barometer for the monthly performance of China’s factories and is based on surveys from purchasing and supply managers at more than 700 manufacturers across the country.

“The index still remains above 50%, that means the strong growth on economy side,” said the CFLP analyst.

A PMI reading above 50% suggests expansion and a reading below 50% indicates contraction.

“We can see the market demand is still flourishing as the new order index runs at a high level though it dropped a little from last month,” the CFLP analyst said.

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By: Dolly Wu
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