China May PMI falls to 50.4% as economy slows down

01 June 2012 04:20  [Source: ICIS news]

SINGAPORE (ICIS)--China’s Purchasing Managers’ Index (PMI) declined to 50.4% in May, down by 2.9 percentage points from April, indicating a stable-to-softer economy in China, official data showed on Friday.

But the index has remained above the 50% threshold, indicating that the Chinese industries have remained on an expansion mode, according to the China Federation of Logistics and Purchasing (CFLP).

The new order sub-index declined to 49.8% in May, down 4.7 percentage points from April, the data showed.

The sharp decline in this sub-index indicates a likely reduction in operating rates at manufacturing facilities in the near term, said Zhang Liqun, an analyst at CFLP.

The Chinese government is fine-tuning its macroeconomic policies to ensure stable growth.

Production sub-index under the PMI dropped by 4.3 percentage points to 52.9% in May, while the export index declined by 1.8 percentage points to 50.4%. The data also showed a 2.4-percentage point slippage in import index to 48.1%.

The sub-index for purchasing price in May fell by 10 percentage points from April to 44.8%, CFLP said.

China’s PMI is based on a survey of 820 manufacturers. A PMI reading above 50% indicates an expansion, while a reading below 50% means a contraction.

By: Dolly Wu
+65 6780 4359

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