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PMI down to slowest in 5 months

2012-06-05 16:36:42Source:chinadaily.com.cnAuthor: Chen Jia

Expansion of China's manufacturing sector cooled to its slowest in five months in May, with a lower-than-expected Purchase Management Index of 50.4, the official data showed on Friday.
 
The index sharply fell from the April 53.3, and dropped 2.7 points lower than that in March, indicating that the growth rate of the world's second largest economy may continue to slow down, a statement from the National Bureau of Statistics said.
 
"The large drop in May was in line with the overall slowing economic expansion," said Zhang Liqun, a senior economist at the Development Research Center of the State Council.
 
He predicted that the production of manufacturing companies may maintain a contraction in the short term as the new order index is decreasing fast, showing 49.8 in May, compared with 54.5 in April.
 
Beijing is organizing a new set of stimulus policies to boost domestic consumption by facilitating investment, which is a signal that authorities are turning the stance to "growth stabilization".
 
"The decelerating trend of China's economy may moderate as the policies come into force," according to Zhang.
 
The sub-index that indicates production declined to 52.6 in May, 4.3 points lower than that in April, said the NBS.
 
Meanwhile, the index showing raw material purchasing prices suddenly fell to 44.8 last month from 54.8 in May, indicated an easing production inflation affected by the dropping global commodities prices, the statement showed.