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China’s May PMI pick up, but economy still signals slowdown

by ChemOrbis Editorial Team - content@chemorbis.com
  • 01/06/2015 (11:30)
According to data from China’s National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing, a measure of the country’s manufacturing activity posted the highest level in six months in May, in spite of the fact that exports continued to decrease. The official purchasing managers’ index (PMI) increased to a reading of 50.2 in May following a reading of 50.1 in April, in line with Reuters analysts’ forecast. Any figure above 50 indicates an expansion.

Analysts commented that despite the pick up in manufacturing, the latest data showed that foreign demand remained stagnant, suggesting that the government may need to adopt additional monetary easing in the upcoming months or make further rate cuts to prevent a steeper slowing in economy.

A separate manufacturing PMI compiled by HSBC and Markit Economics, meanwhile, edged up to a reading of 49.2 in May from April’s reading of 49.1. Any figure below 50 indicates a contraction.

In the first quarter, Chinese economic growth slowed to six year low of 7% after expanding 7.4% in 2014 due to a weak housing market and a slowdown in exports, domestic investment and consumption.
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