May PMI Stays at 52%: Papermaking and Printing Among Sectors Above 50%

In May, the China Manufacturing Purchasing Managers' Index (PMI) released by the China Federation of Logistics and Purchasing came in at 52%, staying above the 50% mark. On the year-to-date trend, however, the index has continued to edge down aside from a brief rebound earlier in the year, indicating that economic growth is moderating steadily.

Sub-indices weakened to varying degrees. New orders, backlog of orders, purchase prices and raw materials inventory all declined noticeably, with purchase prices posting the sharpest drop, pointing to cooling on both the demand and price fronts.

By sector, the report listed electrical machinery and equipment manufacturing, petroleum processing and coking, pharmaceutical manufacturing, chemical fiber manufacturing and rubber/plastics products, and transport equipment manufacturing. By region, the eastern and western regions were above 50%; by product type, raw materials and energy, intermediate goods and consumer goods were above 50%, while producer goods were below 50%.

Commenting on the May manufacturing PMI survey, special analyst Zhang Liqun said the continued decline reflects a greater possibility of slower economic growth. A relatively large fall in the purchase price index suggests inflation expectations may change and destocking may increase, both of which would slow growth. On the demand side, export and consumption growth eased, but investment remained relatively strong and demand continued to grow steadily and fairly quickly. Since demand is a fundamental factor determining the growth trend, the future direction of China's economic growth rate still needs further observation.

The new orders index declined. The monthly reading fell from the previous month. Petroleum processing and coking, electrical machinery and equipment manufacturing and others stood above 50%, while metal products, special-purpose equipment manufacturing and others were below 50%. By region, the eastern and central regions were above 50%; by product type, raw materials and energy, intermediate goods and consumer goods were above 50%, while producer goods were below 50%.

The production index edged down. The monthly reading was lower than a month earlier. Special-purpose equipment manufacturing, chemical fiber manufacturing and rubber/plastics products and others were below 50%, while petroleum processing and coking, electrical machinery and equipment manufacturing and others were above 50%. By region, the eastern and western regions were above 50%; by product type, raw materials and energy, intermediate goods and consumer goods were above 50%, while producer goods were below 50%.

The import index and new export orders index were basically stable. The import index slipped slightly from the previous month. Beverage manufacturing, papermaking, printing and cultural, educational and sports goods manufacturing, petroleum processing and coking and others were above 50%; textiles, non-metallic mineral products, transport equipment manufacturing and others were below 50%. The new export orders index also fell from a month earlier. Wood processing and furniture manufacturing, electrical machinery and equipment manufacturing and others were above 50%.

Source: China Packaging Network (pack.cn); original link: http://news.pack.cn/show-369967.html