HSBC: May PMI dropped to 11-month low

"Caijing reporter Li Gaoyang" HSBC's June 1 report showed that China's manufacturing purchasing managers ' index fell back to a 11-month low in May, indicating a modest improvement in China's manufacturing operations.　　The data showed that PMI dropped from 55.2 in April to 52.7, indicating a weakening of China's manufacturing recovery in May. In its report, China's manufacturing output continued to grow in May, but at a slight rate and fell back to its lowest level in 12 months, in line with the slowdown in new business growth. Respondents said the decline in the pace of new order expansion reflects the relative weakness of domestic and foreign market demand.　　New business growth from overseas in May was at its lowest level in 10 months. The average purchasing cost of China's manufacturing sector rose sharply in May, but the increase has fallen markedly, the lowest in nearly 7 months, according to HSBC statistics. The price of grain, oil and steel has been reported to have risen. At present, the input price has been on the rise for 11 consecutive months. However, manufacturers have not been able to fully transfer the pressure of rising costs to customers, and output prices have risen at their lowest level since October 2009.　　This mainly indicates that the new business competition is fierce, there are some manufacturers to reduce the factory prices to meet customer requirements. Qu Hongbin, HSBC's China chief economist, said in a report: "The PMI slowdown shows that the risk of overheating is mitigated as austerity measures are effective." Nevertheless, we do not believe that the Chinese economy will bottom out two times, and that existing large-scale infrastructure investment and flexible private consumption will support robust economic growth in the second half of 2010. According to China's Logistics and Procurement Association June 1 data, May 2010 China's manufacturing Purchasing managers index was 53.9%, down 1.8% from April. The China Federation of Logistics and Procurement believes that the index has remained above 50% for 15 months, although it has fallen, but remains relatively high, reflecting the current trend of China's economic development has stabilized.