China says manufacturing continued to expand in May
Posted on: June 5, 2009
AFP – Tuesday, June 2
SHANGHAI (AFP) – – China’s manufacturing activity expanded in May for the third consecutive month, according to official data released, the latest tentative sign of economic recovery.
The official Purchasing Managers’ Index, or PMI, for the manufacturing sector pulled back slightly to 53.1 in May, down from 53.5 in April, the China Federation of Logistics and Purchasing said in a statement on its website.
A reading above 50 means the sector is expanding, while a reading below 50 indicates an overall decline.
“We expect manufacturing activity will continue to expand in the coming months, supported by the roll-out of the government stimulus,” Jing Ulrich, a Hong Kong-based economist with JP Morgan, said in a research note.
Beijing announced a four-trillion-yuan (585-billion-dollar) stimulus package last year in a bid to prop up growth in the world’s third largest economy by boosting spending on infrastructure and other government-backed projects.
The PMI sank to a record low of 38.8 in November due to the global financial crisis, but improved continuously in the five months until April, moving above 50 in March.
A separate PMI published by independent brokerage CLSA on Monday pointed to a second straight month of production growth in May, with the index standing at 51.2, up from 50.1 in April and 44.8 in March.
“The index provided further evidence to suggest that operating conditions in the Chinese manufacturing sector have stabilised, and that solid growth momentum may be building,” the Hong Kong-based brokerage said in a statement.
Manufacturing accounts for more than 40 percent of the economy in China, which has been hit hard by evaporating demand for its products in key export markets such as the United States and Europe.
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