Xinhua recently reported that the HSBC PMI (Purchasing Managers Index) number for the Chinese manufacturing industry had an initial value of 49.6 for the month of May. The new number is the lowest in seven months. The breakdown numbers for new orders, new exports, and the employment index are all below fifty. Experts expressed the belief that these numbers indicated a decline in the manufacturing industry. The outlook for the second quarter is not optimistic. Low export levels seems to have had a direct impact on the overall decline of manufacturing activities. However the domestic demand side is weak as well. The central government investment in April was weakened and manufacturers faced inventory pressure. In addition to PMI numbers, the growth rate of the generated electrical energy in May also suffered a decline. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: Xinhua, May 24, 2013