May. 24, 2012 (China Knowledge) - The preliminary HSBC China manufacturing purchasing managers' index (PMI), a preliminary gauge of China's manufacturing sector, dropped to 48.7 in May this year, 0.6 points lower than the final reading of 49.3 in April, according to data released by HSBC Holdings PLC<0005
The decline in the HSBC PMI indicated that business conditions for Chinese manufacturers deteriorated in May and heightened concerns over a significant slowdown in the Chinese economy.
The reading stayed below 50 for the seventh consecutive month. A reading below 50 indicates contraction from the previous month, while a reading above 50 suggests expansion.
The new export order index fell to 47.8 from 50.2 in April, and declines also recorded in new order index, employment index, input price index and output price index.
Qu Hongbin, chief economist for HSBC China, the decrease in the preliminary PMI reflected worsening export conditions. With easing inflation pressure, the Chinese government should further slacken its policies, added Qu.