China's May manufacturing sector PMI at 53.1 per cent

China's Purchasing Managers' Index (PMI) for the manufacturing sector recorded 53.1 per cent in May, the China Federation of Logistics and Purchasing (CFLP) reported today.

The May PMI of 53.1 is down 0.4 percentage points from April's figure of 53.5 per cent.

This is the third consecutive month that China's PMI has been above 50 per cent since July 2008, when the index dropped to 48.4 per cent.
A reading of above 50 suggests expansion, while one below 50 indicates contraction.

The PMI includes a package of indices that measure economic performance.

The PMI is based on a survey jointly conducted by the National Bureau of Statistics, covering decisions by purchase and supply managers of more than 700 companies in 20 industries, including energy, metallurgy, automobile manufacturing and electronics.

The survey follows changes in output, export orders, new orders, inventories, input costs, output prices and employment and the data is seasonally adjusted.

May's output index at 56.9 per cent was down compared to 57.4 per cent recorded in April, while the new order index declined to 56.2 per cent from 56.6 per cent in April.

The purchasing price index was up 1.8 per cent compared to 53.1 per cent in April.

The index staying above 50 is a healthy sign, especially indexes of new orders and output index and purchasing price index indicating that demand for Chinese good is still maintainable and the economy is progressing in-spite of the global slow down.