China’s manufacturing activity shrank more than first reported in May, HSBC’s final purchasing managers’ index (PMI) has revealed.
The headline number fell to 49.2 from 50.4 in April. This was worse than preliminary 49.6 announced on May 23.
A reading below 50 indicates contraction in the sector.
It was the first contraction in seven months.
Qu Hongbin, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, said the PMI “suggests a marginal weakening of manufacturing activities towards the end of May, thanks to deteriorating domestic demand conditions”.
“With persisting external headwinds, Beijing needs to boost domestic demand to avoid a further deceleration of manufacturing output growth and its negative impact on the labour market. The new leaders should strike a delicate balance between reform and growth,” he said.
The result was in stark contrast to the Chinese government’s PMI result for May, which came in at 50.8, better than April’s 50.6, the National Bureau of Statistics said Saturday.
China’s economy, the world’s second largest, expanded 7.8 per cent in 2012, its worst result in 13 years.
HSBC’s data has renewed fears that China is slowing down again.
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