The manufacturing sector in China remained in contraction in May, albeit at a slower pace, the latest survey from HSBC revealed on Thursday with a two-month high PMI score of 49.1.
That was shy of expectations for a score of 49.3, although it was up from 48.9 in April. It also remained beneath the boom-or-bust line of 50 that separates expansion from contraction.
“The Flash China Manufacturing PMI pointed to a further deterioration in operating conditions in April, with production declining for the first time in 2015 so far,” said Markit economist Annabel Fiddes.
Among the individual components, the output index weighed on the overall reading by sinking to a 13-month low of 48.4 from 50.0 in April. New export orders also turned to contraction.
New orders, employment, backlogs of work, output prices, input prices and stocks of purchases all contracted at a slower rate.
Stocks of finished goods and quantity of purchases decreased at a faster rate, while supplier delivery times lengthened after shortening in the previous month.
“Moreover, softer client demand, both at home and abroad, along with further job cuts indicate that the sector may find it difficult to expand, at least in the near-term, as companies tempered production plans in line with weaker demand conditions,” Fiddes said.
The material has been provided by InstaForex Company – www.instaforex.com