China manufacturing PMI rises to highest in May
June 1, 2014, 4:34 am

A reading above the 50 level indicates expansion in factories’ activity while below that mark indicates contraction [AP]

In what can be seen as signs of a stabilizing economy, the purchasing managers’ index (PMI) increased to 50.8 in May, up from 50.4 in April, according to data released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP).

A reading above the 50 level indicates expansion in factories’ activity while below that mark indicates contraction.

This is the third consecutive monthly uptick of the widely watched data. The index, seen as one of the key indicators of how the economy performs, began to climb in March after three months of declines.

Eight among the 12 sub-indices in the PMI registered growth, with the sub-index for production edging up 0.3 to 52.8 after dipping 0.2 in the previous month, according to the NBS and the CFLP.

The sub-index for new orders, seen by analysts as the most important one among all the sub-indices, “jumped” by 1.1 to 52.3 in May after gaining 0.6 in April.

The sub-index for export orders, which “slumped” 1.1 in April, reversed the declining trend and rose by 0.2 to 49.3.

The employment sub-index of the PMI dipped to 48.2 from April’s 48.3, pointing to contraction in the job market.

China’s Finance Ministry warned local governments last week to quicken budgetary allocations for key projects to boost the economy.

“We noticed problems that the fiscal payment is relatively slow, with large amounts of budget money being carried over to next year, which leaves a big amount of treasury deposits in the coffers,” said a statement on the Ministry’s website.

Source: Agencies