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HSBC PMI for China’s Manufacturing Sector Continues to Decline

CNForex recently reported that HSBC reported the official May PMI (Purchasing Managers Index) number for the Chinese manufacturing sector to be 48.4. The index has remained under 50.0 for 7 consecutive months, which indicates that the manufacturing sector has been shrinking. It is believed that the PMI number reflects that the current economy is suffering from weak domestic and international demand, causing manufacturing companies to have a reduced output. Statistics show that, in May, these companies employed the lowest number of laborers in the last 3 year. The unemployment rate in this sector is increasing. Also in May, inventory declined and product prices dropped. PMI is an indicator of financial activity; it reflects purchasing managers’ acquisition of goods and services. A PMI number below 50 typically is an indication of decline.

Source: CNForex, June 1, 2012