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China manufacturing PMI lowest in 9 months
By Wang Yanlin |
June 1, 2011, Wednesday
|
Online Edition
Online Edition
CHINESE manufacturing grew at the slowest pace in nine months in May as the country tries to cool its economy.
Analysts expected further moderation in the rate when the world's second-largest economy may suffer a severe power shortage in the coming months while rising production costs add more pressure to manufacturers.
The official Purchasing Managers Index, a comprehensive gauge of industrial activities across the country, decreased 0.9 percentage point from a month earlier to settle at 52 percent in May, the China Federation of Logistics and Purchasing said today.
The retreat was the second dip in a row after China tightened its monetary policies to avoid an overheated economy.
A reading above 50 percent indicates an expansion.
"Less active manufacturing activities are expected as China's tightening polices takes effect," said Peng Wensheng, chief economist at the China International Capital Corp Ltd. "But it is easing at a slow pace that may be unable to prevent policymakers from releasing more tightening measures."
Peng estimated the index will continue to moderate because of potential power rationing in the following months, but he said it is less likely to drop below 50 percent any time soon.
The HSBC China Manufacturing Purchasing Managers Index reflected a similar trend. The index compiled by the bank and slanted more towards privately-owned and export-oriented firms stood at 51.6 in May, also a ten-month low.
Analysts expected further moderation in the rate when the world's second-largest economy may suffer a severe power shortage in the coming months while rising production costs add more pressure to manufacturers.
The official Purchasing Managers Index, a comprehensive gauge of industrial activities across the country, decreased 0.9 percentage point from a month earlier to settle at 52 percent in May, the China Federation of Logistics and Purchasing said today.
The retreat was the second dip in a row after China tightened its monetary policies to avoid an overheated economy.
A reading above 50 percent indicates an expansion.
"Less active manufacturing activities are expected as China's tightening polices takes effect," said Peng Wensheng, chief economist at the China International Capital Corp Ltd. "But it is easing at a slow pace that may be unable to prevent policymakers from releasing more tightening measures."
Peng estimated the index will continue to moderate because of potential power rationing in the following months, but he said it is less likely to drop below 50 percent any time soon.
The HSBC China Manufacturing Purchasing Managers Index reflected a similar trend. The index compiled by the bank and slanted more towards privately-owned and export-oriented firms stood at 51.6 in May, also a ten-month low.
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